Qualified Statement of the Demand for Religion

Although it is circumscribed by the qualifications enumerated in the preceding section, our notion of the demand for particular forms of religion is sufficiently meaningful to inform many of the developments that have taken place in the evolution of Christianity. Central to our analysis is the characterization of religion as a Z-good. The Z-good is a device employed by Gary Becker in his seminal article on household production.30 In Becker's formulation, households are both producing units (i.e., "small factories'') and consuming units (i.e., utility-maximizers). As producers they combine time and market goods (inputs and outputs) to clean, feed, procreate and otherwise produce useful commodities. The final goods produced by a household are, in Becker's formulation, Z-goods. Examples of Z-goods are meals and clean clothes. The production of a meal requires time and effort to transform foodstuffs into a final product. Meat, eggs, fruit, vegetables, cheese, and spices may be considered outputs in certain consumer markets but become inputs in the production of a meal. In producing meals (vs. other household products) a household maximizes its utility subject to its production capabilities and its budget constraint. The solution of this maximization problem provides not only the household's demand for market goods but also its members' labor supplies to the market and to household production tasks.

Religion is a Z-good because whatever shape the final output takes (whether it be assurances of salvation, social solidarity, social insurance, business contacts and security, fellowship, etc.), religious services are produced by combining capital goods (physical and human), labor, and market goods. The resulting output is consumed in a utility-maximizing manner. Demand for this Z-good is a function of its full price, which amounts to resources sacrificed (including money and time) in order to participate in religious activity. As recognized by Azzi and Ehrenberg, there is an inverse relationship between money and time so that, other things being equal, in spatial equilibrium the form of religion chosen depends on the composition of its full price. Households with lower time values will supply greater amounts of time to religious participation than those with high time values, and vice versa.31 In highly developed money economies, less ritualistic resource-oriented religions have evolved. In these circumstances the monetary component of price is large relative to the time input. The reverse is generally the case among low-income individuals or in low-income and primitive societies. Other things equal, the higher the full price of religion the lower the quantity demanded of it, within certain parameters. Depending on an individual's uncertainty profile and other determinants, a change in full price will have both income and substitution effects. A positive income effect results when the price of any consumable falls, thus raising the real income (or purchasing power) of the same level of expenditures. A negative substitution effect arises when the price of any consumable rises, thus encouraging the search for lower-priced substitutes. As incomes rise, both the income effect and the substitution effect work toward the adoption of time-saving religious practices. Religion thus becomes less formal, less time-intensive, and more money-intensive over time as economic growth proceeds. Hence, one testable proposition is that the length of church services should vary inversely with income. But we may also expect that at certain critical values individuals will alter the form of religion chosen (i.e., switch religions). Theoretically, we should be able to calculate and predict the "switch points'' between forms of religion once we know the intensity of demand among participants.

Having robed our concept of demand for religion in appropriate qualifications, we may proceed to a more or less standard economic formulation. The demand for any given form of religion (Brand X) may be expressed as a function of its full price and a set of demand shifters. Demand shifters are determinants other than full price that tend to alter the quantity of religion consumed. Thus a stylized version of demand may be set forth in the following manner: The quantity demanded (i.e., number of adherents) of a particular form of religion will depend on its full price, the full price of its substitutes, household income (or wealth), members' tolerance for risk, and utility. We recognize that education may also be an important determinant, but exclude it here in the interest of simplicity—because income and education are highly correlated, we feel that the effects of education may already be captured in income. In a "tight" theoretical model containing both stocks and flows, the acqui sition of "religious capital'' through time, or an inherited stock of some particular religious form, would also be important in establishing a demand curve,32 but we omit these complications, too, in order to keep the analysis as simple as possible. In this stylized formulation, full price is the sum of money prices (contributions and other monetary exactions) and the value of the time spent in attendance and on ritual. Thus a doubling of the tithe imposed by any church would (all else remaining the same) increase the full price of a particular form of religion and reduce the quantity demanded of it. By the same token, an increase in the wage rate of household members would increase the opportunity cost of time spent on religious participation.

Like any other demand curve, the demand for religion will shift right-ward or leftward owing to a number of factors. A lowering of the full price of another form of religion (Brand Y) would, other things equal, reduce the entire demand curve for Brand X. An increase in the full price of one religion (Brand X)—which includes both money and time—will reduce the quantity demanded of Brand X. Suppose, for example, that the wage rate for an individual rises. This means that the value of time rises for her and the consumer will shift away from a time-intensive religion. But there is another effect as well when the wage rate changes—an income effect—and here we must confront the question of whether a religious good is normal or inferior (no pejorative context suggested). If income or wealth rises (or falls)—as it would with an increase (decrease) in the wage rate—and the quantity taken of the religious service (Brand X) declines (or rises), the good is said to be inferior in economic terms. The converse is true if religion is considered a normal good—a rise (fall) in income or wealth would increase (decrease) the quantity taken of Brand X consumed. If we use wage rates to proxy income, the literature suggests that there is a mild negative relationship between income and religious participation suggesting that religion generally is an inferior good. This result controls for bidirectional causality between the two. What we have is a contest between an income effect and a substitution effect. The data suggest that this substitution effect dominates any "pure" income effect that we cannot observe. It is probable that income effects differ across religions. Worldwide, Catholicism and Protestant fundamentalism are probably inferior goods, whereas liberal Protestantism and Judaism are likely normal goods. Identification of an income effect, however, is extremely difficult empirically and it may be that individuals substitute other inputs—monetary contributions—for participation as their incomes rise.

Most important perhaps, changes in risk tolerance will affect the position of the demand curve for a particular form of religion. Other things equal, the advent of war or terrorism will increase the demand for most forms of religion, as evidenced by an increase in church attendance during such circumstances. But there are many factors that affect an individual's risk profile. Stability of governments, the level of educational attainment, the state of scientific knowledge, and survivability conditions, for example, all will shift the demand for particular religious forms by altering an individual's perception of risk and fear of the unknown. In economics the demand curve is a logical consequence of the presumption of rational behavior. Thus we argue that religious behavior is as rational as any other kind of market behavior. Our final position is this: Churches produce various public and private goods. We are interested in one important private good: the doctrinal transaction (implied contract) between church and member regarding salvation. The operations of this market drive all of our analyses in the ensuing chapters. Church doctrine and practice are determined by the forces of supply and demand in this market. Of special significance is that fact that the church provides a service. Since services are nontradable and cannot be arbitraged or bought at a low price and sold at a higher one, this means that conditions are especially ripe in monopolistic religious markets for sellers to engage in price discrimination, provided consumers can be segmented into different demand classes. Price discrimination allows a seller producing religious outputs at the same cost to successfully sell the same item, or virtually the same item, at different prices to different customers.

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