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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.

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Paper provided by University of Trier, Department of Economics in its series Research Papers in Economics with number 2013-06.

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Length: 20 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:trr:wpaper:201306
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  1. 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.
  2. 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.
  3. McCleary, Rachel & Barro, Robert, 2002. "Religion and Political Economy in an International Panel," Scholarly Articles 3221170, Harvard University Department of Economics.
  4. Harttgen, Kenneth & Opfinger, Matthias, 2013. "National Identity and Religious Diversity," MPRA Paper 50151, University Library of Munich, Germany.
  5. Robert J. Barro & Jong-Wha Lee, 2010. "A New Data Set of Educational Attainment in the World, 1950-2010," NBER Working Papers 15902, National Bureau of Economic Research, Inc.
  6. 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, vol. 26(3), pages 1129-1174, July.
  7. 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.
  8. Rachel M. McCleary & Robert J. Barro, 2006. "Religion and Economy," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 49-72, Spring.
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