Economics of religion

The economics of religion concerns both the application of the techniques of economics to the study of religion and the relationship between economic and religious behaviours. Contemporary writers on the subject trace it back to Adam Smith (1776). Empirical work examines the causal influence of religion in microeconomics to explain individual behaviour and in the macroeconomic determinants of economic growth. Religious economics (or theological economics) is a related subject sometimes overlapping or conflated with the economics of religion. Adam Smith laid a foundation for economic analysis for religion in The Wealth of Nations (1776), stating that religious organisations are subject to market forces, incentive and competition problems like any other sector of the economy. Max Weber later identified a relationship between religion and economic behaviour, attributing in 1905 the modern advent of capitalism to the Protestant reformation. Research highlights the importance of religious orthodoxy on moral behaviours and versions of the Golden Rule “Do unto others as you would have others do unto you” are common to most major religions. Others argue it promotes cooperation and trust within culturally defined groups or clubs. Studies compare the complementary effects of religious values such as charity, forgiveness, honesty and tolerance and religious social groups where membership instils favouritism or discrimination towards in or outgroup members. The believing channel of religion behaviours concerns costly effort concerned with divine reputation. Azzi and Ehrenberg (1975) propose individuals allocate time and money to secular and religious institutions to maximise utility in this life and the afterlife. The colonisation of religious minds by the morally concerned supernatural or “Big Gods” diffused behaviours derived from moral instruction. The belonging approach to religion considers the social notion of between and within religious groups.