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Two Sides of a Medal: The Changing Relationship between Religious Diversity and Religiosity


  • Matthias Opfinger


Religious Market Theory assigns basic market principles to the market for religion. The derived supply side model proposes that religiosity is higher on a competitive market, characterized by high religious diversity. Churches will provide higher quality goods compared to monopolistic churches. The demand side model, originating from the Secularization Hypothesis, suggests that the establishment of new churches casts doubt on the existing religion, which reduces overall religiosity. I find a negative linear relationship between religious diversity and religiosity which supports the demand side model. However, high levels of income, education, and democracy mitigate this effect. The relationship becomes positive in the most developed countries. The demand side model seems to dominate in less developed countries, while the supply side model better describes the market for religion after Secularization has occurred.

Suggested Citation

  • Matthias Opfinger, 2013. "Two Sides of a Medal: The Changing Relationship between Religious Diversity and Religiosity," Research Papers in Economics 2013-06, University of Trier, Department of Economics.
  • Handle: RePEc:trr:wpaper:201306

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    References listed on IDEAS

    1. Kenneth Harttgen & Matthias Opfinger, 2014. "National Identity and Religious Diversity," Kyklos, Wiley Blackwell, vol. 67(3), pages 346-367, August.
    2. Ronen Bar-El & Teresa García-Muñoz & Shoshana Neuman & Yossef Tobol, 2013. "The evolution of secularization: cultural transmission, religion and fertility—theory, simulations and evidence," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(3), pages 1129-1174, July.
    3. Hanson, Gordon H. & Xiang, Chong, 2013. "Exporting Christianity: Governance and doctrine in the globalization of US denominations," Journal of International Economics, Elsevier, vol. 91(2), pages 301-320.
    4. 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.
    5. Rachel M. McCleary & Robert J. Barro, 2006. "Religion and Economy," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 49-72, Spring.
    6. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    7. McCleary, Rachel & Barro, Robert, 2002. "Religion and Political Economy in an International Panel," Scholarly Articles 3221170, Harvard University Department of Economics.
    8. 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.
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    Cited by:

    1. Matthias Opfinger, 2014. "‘United in Diversity’---Does Social Diversity Increase Subjective?," Research Papers in Economics 2014-10, University of Trier, Department of Economics.

    More about this item


    Supply side; Demand side; interaction; attenuating effects;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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