IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/10374.html
   My bibliography  Save this paper

Pay or Pray? The Impact of Charitable Subsidies on Religious Attendance

Author

Listed:
  • Jonathan Gruber

Abstract

The economic argument for subsidizing charitable giving relies on the positive externalities of charitable activities, particularly from the religious institutions that are the largest recipients of giving. But the net external effects of subsidies to religious giving will also depend on a potentially important indirect effect as well: impacts on religious participation. Religious participation can be either a complement to, or a substitute with, the level of charitable giving. Understanding these spillover effects of charitable giving may be quite important, given the existing observational literature that suggests that religiosity is a major determinant of well-being among Americans. In this paper I investigate the impact of charitable subsidies on a measure of religious participation, attendance at religious services. I do so by using data over three decades from the General Social Survey, as well as confirming the impact of such subsidies on religious giving using the Consumer Expenditure Survey. I find strong evidence that religious giving and religious attendance are substitutes: larger subsidies to charitable giving lead to more religious giving, but less religious attendance, with an implied elasticity of attendance with respect to religious giving of -0.92. These results have important implications for the debate over charitable subsidies. They also serve to validate economic models of religious participation.

Suggested Citation

  • Jonathan Gruber, 2004. "Pay or Pray? The Impact of Charitable Subsidies on Religious Attendance," NBER Working Papers 10374, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:10374
    Note: PE
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w10374.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Barrett, Kevin S. & McGuirk, Anya M. & Steinberg, Richard S., 1997. "Further Evidence on the Dynamic Impact of Taxes on Charitable Giving," National Tax Journal, National Tax Association;National Tax Journal, vol. 50(2), pages 321-334, June.
    2. Barrett, Kevin S. & McGuirk, Anya M. & Steinberg, Richard S., 1997. "Further Evidence on the Dynamic Impact of Taxes on Charitable Giving," National Tax Journal, National Tax Association, vol. 50(2), pages 321-34, June.
    3. Laurence R. Iannaccone, 1998. "Introduction to the Economics of Religion," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1465-1495, September.
    4. Randolph, William C, 1995. "Dynamic Income, Progressive Taxes, and the Timing of Charitable Contributions," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 709-738, August.
    5. Iannaccone, Laurence R, 1992. "Sacrifice and Stigma: Reducing Free-Riding in Cults, Communes, and Other Collectives," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 271-291, April.
    6. Clotfelter, Charles T., 1985. "Federal Tax Policy and Charitable Giving," National Bureau of Economic Research Books, University of Chicago Press, number 9780226110486, Febrero.
    7. Sullivan, Dennis H, 1985. "Simultaneous Determination of Church Contributions and Church Attendance," Economic Inquiry, Western Economic Association International, vol. 23(2), pages 309-320, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Gerald E. Auten & Holger Sieg & Charles T. Clotfelter, 2002. "Charitable Giving, Income, and Taxes: An Analysis of Panel Data," American Economic Review, American Economic Association, vol. 92(1), pages 371-382, March.
    3. Bakija, Jon & Heim, Bradley T., 2011. "How Does Charitable Giving Respond to Incentives and Income? New Estimates From Panel Data," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(2), pages 615-650, June.
    4. Jon Bakija & Bradley Heim, 2008. "How Does Charitable Giving Respond to Incentives and Income? Dynamic Panel Estimates Accounting for Predictable Changes in Taxation," NBER Working Papers 14237, National Bureau of Economic Research, Inc.
    5. Hungerman, Daniel M., 2005. "Are church and state substitutes? Evidence from the 1996 welfare reform," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2245-2267, December.
    6. Yörük, Barış K., 2014. "Does giving to charity lead to better health? Evidence from tax subsidies for charitable giving," Journal of Economic Psychology, Elsevier, vol. 45(C), pages 71-83.
    7. Zhiyong An, 2015. "On the sufficiency of using the elasticity of taxable income to calculate deadweight loss: the implications of charitable giving and warm glow," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(6), pages 1040-1047, December.
    8. Kwak, Sungil, 2011. "The Impact of Taxes on Charitable Giving: Empirical Evidence from the Korean Labor and Income Panel Study," MPRA Paper 36845, University Library of Munich, Germany.
    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, July.
    10. Pedro Pita Barros & Nuno Garoupa, 2002. "An Economic Theory Of Church Strictness," Economic Journal, Royal Economic Society, vol. 112(481), pages 559-576, July.
    11. Barış K. Yörük, 2013. "The Impact of Charitable Subsidies on Religious Giving and Attendance: Evidence from Panel Data," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1708-1721, December.
    12. Pavol Minárik, 2013. "Ekonomie náboženství a její relevance pro ekonomy ve střední Evropě [Economics of Religion and its Relevance for Economists in Central Europe]," Politická ekonomie, Prague University of Economics and Business, vol. 2013(5), pages 691-704.
    13. Russell N. James & Deanna L. Sharpe, 2007. "The “Sect Effect” in Charitable Giving: Distinctive Realities of Exclusively Religious Charitable Givers," American Journal of Economics and Sociology, Wiley Blackwell, vol. 66(4), pages 697-726, October.
    14. Daniel M. Hungerman, 2011. "Substitution and Stigma: Evidence on Religious Competition from the Catholic Sex-Abuse Scandal," NBER Working Papers 17589, National Bureau of Economic Research, Inc.
    15. Jonathan Rosborough, 2015. "A Theory of Congregational Giving," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(2), pages 270-295, April.
    16. Guido Heineck, 2001. "The Determinants of Church Attendance and Religious Human Capital in Germany: Evidence from Panel Data," Discussion Papers of DIW Berlin 263, DIW Berlin, German Institute for Economic Research.
    17. Adena, Maja, 2014. "Tax-price elasticity of charitable donations: Evidence from the German taxpayer panel," Discussion Papers, Research Unit: Economics of Change SP II 2014-302, WZB Berlin Social Science Center.
    18. Jean-Paul Carvalho, 2009. "A Theory of the Islamic Revival," Economics Series Working Papers 424, University of Oxford, Department of Economics.
    19. Gilat Levy & Ronnie Razin, 2009. "Religious Organizations," STICERD - Theoretical Economics Paper Series 544, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    20. Peter G. Backus & Nicky L. Grant, 2019. "How sensitive is the average taxpayer to changes in the tax-price of giving?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(2), pages 317-356, April.

    More about this item

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:10374. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.