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The (After) Life-Cycle Theory of Religious Contributions

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  • S. Brock Blomberg
  • Thomas DeLeire
  • Gregory D. Hess

Abstract

We construct and estimate an economic model of religious giving. We employ a dynamic consumer optimization model with mortality in which intra-temporal utility stems from both consumption and religious contributions. Individuals also decide how to allocate resources between religious contributions (which have both a this-life consumption value and an after-life investment value) and other consumption expenditures. If religious contributions do not have an after-life investment value, the ratio of contributions to consumption expenditures should be unrelated to the probability of death. However, if there is an investment value from religious giving, individuals should allocate a greater share of their income to religious contributions as their probability of death increases. We estimate the model using data from the Consumer Expenditure Survey on the consumption and religious contribution patterns of a repeated cross-section of households and of a synthetic cohort panel. We find strong evidence that individuals behave as if religious contributions have a value in the after-life, in a manner consistent with the after life-cycle model. The estimates of the structural parameters of the model also imply that while after-life investment considerations (i.e. impending death) are an important determinant of the life-cycle profile of religious contributions, within-life (i.e. religious consumption) factors pin down a household’s average level of religious contributions over a lifetime.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1854.

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Date of creation: 2006
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Handle: RePEc:ces:ceswps:_1854

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Keywords: god; life-cycle; consumption; religion; tithing;

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References

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  1. Laurence R. Iannaccone, 1998. "Introduction to the Economics of Religion," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1465-1495, September.
  2. Dehejia, Rajeev & DeLeire, Thomas & Luttmer, Erzo F.P., 2007. "Insuring consumption and happiness through religious organizations," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 259-279, February.
  3. Jonathan Gruber, 2005. "Religious Market Structure, Religious Participation, and Outcomes: Is Religion Good for You?," NBER Working Papers 11377, National Bureau of Economic Research, Inc.
  4. Stark, Rodney & Iannaccone, Laurence R & Finke, Roger, 1996. "Religion, Science, and Rationality," American Economic Review, American Economic Association, vol. 86(2), pages 433-37, May.
  5. Ehrenberg, Ronald G, 1977. "Household Allocation of Time and Religiosity: Replication and Extension," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 85(2), pages 415-23, April.
  6. Robert J. Barro & Rachel McCleary, 2003. "Religion and Economic Growth," NBER Working Papers 9682, National Bureau of Economic Research, Inc.
  7. Martin Feldstein & Jeffrey B. Liebman, 2001. "Social Security," NBER Working Papers 8451, National Bureau of Economic Research, Inc.
  8. Jonathan Gruber, 2004. "Pay or Pray? The Impact of Charitable Subsidies on Religious Attendance," NBER Working Papers 10374, National Bureau of Economic Research, Inc.
  9. Warren B. Hrung, 2004. "After-Life Consumption and Charitable Giving," American Journal of Economics and Sociology, Wiley Blackwell, vol. 63(3), pages 731-745, 07.
  10. Attanasio, Orazio P & Weber, Guglielmo, 1995. "Is Consumption Growth Consistent with Intertemporal Optimization? Evidence from the Consumer Expenditure Survey," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 103(6), pages 1121-57, December.
  11. Edward L. Glaeser & Giacomo A. M. Ponzetto & Jesse M. Shapiro, 2004. "Strategic Extremism: Why Republicans and Democrats Divide on Religious Values," Harvard Institute of Economic Research Working Papers 2044, Harvard - Institute of Economic Research.
  12. Azzi, Corry & Ehrenberg, Ronald G, 1975. "Household Allocation of Time and Church Attendance," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 83(1), pages 27-56, February.
  13. Gruber Jonathan H, 2005. "Religious Market Structure, Religious Participation, and Outcomes: Is Religion Good for You?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-32, September.
  14. Michael R. Ransom & Gordon B. Dahl, 1999. "Does Where You Stand Depend on Where You Sit? Tithing Donations and Self-Serving Beliefs," American Economic Review, American Economic Association, vol. 89(4), pages 703-727, September.
  15. Gruber, Jonathan, 2004. "Pay or pray? The impact of charitable subsidies on religious attendance," Journal of Public Economics, Elsevier, vol. 88(12), pages 2635-2655, December.
  16. Montgomery, James D, 1996. "Contemplations on the Economic Approach to Religious Behavior," American Economic Review, American Economic Association, vol. 86(2), pages 443-47, May.
  17. Jeffrey Brown & Jeffrey B. Liebman & Joshua Pollet, 2002. "Appendix. Estimating Life Tables That Reflect Socioeconomic Differences In Mortality," NBER Chapters, in: The Distributional Aspects of Social Security and Social Security Reform, pages 447-458 National Bureau of Economic Research, Inc.
  18. Long, Stephen H & Settle, Russell F, 1977. "Household Allocation of Time and Church Attendance: Some Additional Evidence," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 85(2), pages 409-13, April.
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Cited by:
  1. Pyne, Derek Arnold, 2010. "A model of religion and death," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(1), pages 46-54, January.
  2. Teresa Garcia-Munoz, 2010. "Incentives in religious performance: a stochastic dominance approach," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 5(3), pages 176-181, June.

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