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Editor's Choice Does Religion Affect Economic Growth and Happiness? Evidence from Ramadan

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  • Filipe Campante
  • David Yanagizawa-Drott

Abstract

We study the economic effects of religious practices in the context of the observance of Ramadan fasting, one of the central tenets of Islam. To establish causality, we exploit variation in the length of daily fasting due to the interaction between the rotating Islamic calendar and a country’s latitude. We report two key, quantitatively meaningful results: (i) longer Ramadan fasting has a negative effect on output growth in Muslim countries, and (ii) it increases subjective well-being among Muslims. We find evidence that these patterns are consistent with a standard club good explanation for the emergence of costly religious practices: increased strictness of fasting screens out the less committed members, while the more committed respond with an increase in their relative levels of participation. Together, our results underscore that religious practices can affect individual behavior and beliefs in ways that have negative implications for economic performance, but that nevertheless increase subjective well-being among followers. JEL Codes: E20, O40, O43, Z12.

Suggested Citation

  • Filipe Campante & David Yanagizawa-Drott, 2015. "Editor's Choice Does Religion Affect Economic Growth and Happiness? Evidence from Ramadan," The Quarterly Journal of Economics, Oxford University Press, vol. 130(2), pages 615-658.
  • Handle: RePEc:oup:qjecon:v:130:y:2015:i:2:p:615-658
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    File URL: http://hdl.handle.net/10.1093/qje/qjv002
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    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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