Economics is the study of resource allocation – budgeting – as we try to fit everything we want to do into a constrained lifetime. The economics of religion looks at how religious behaviors are affected by the constraints imposed on a consumer’s time and money budgets. The analyses are concerned primarily with religious observances independently of the beliefs (faith) associated with a specific religion.
Religious experience is an economic “good” for any consumer who is willing to spend time and/or money to acquire it. For purposes of analysis, it is helpful to understand religion as an inseparable bundle of three distinct types of economic good. Spirituality – the essential defining characteristic of religious experience – is self-produced; it cannot be bought or hired, requiring the personal engagement by the consumer in its very production. Affiliation with a particular religious set of beliefs (theology) or community (church or church-equivalent) is like membership in a club. The defining characteristic of a “club good” is that its members interact with each other in ways that enhance the productivity of whatever time and money each individual consumer spends. Religions also talk about an “afterlife” – that is, an understanding of the human experience as part of a larger universe of time and space that can be affected for good or evil by an individual’s behavior during his or her lifetime. From this perspective, religious observance is like an investment, although unlike all worldly investments this one yields fruits only in the post-mortem future.
Like any other good, “production” of a religious experience combines labor and capital (time and money) in a process referred to as a production technique (theological tenets). The efficiency of this process depends on the skill of the producer, who in a self-produced good is the same as the worker. Each consumer brings to bear two types of human capital (skill), a set of general skills useful in all economic activities and a set of religion-specific skills that are relevant only for producing the religious good for a specific religious affiliation. The formation of religion-specific human capital begins with the family life of young children and is the main objective of religious education. For any given religious affiliation, synergies (or conflicts) between general education and religious education can also affect its members’ socio-economic success (or disadvantage).
Empirical analysis of grass-roots religious behaviors confirms the importance of these economic processes. Whether over the life-cycle or during the process of economic development, time spent on religious observance is more costly for high-wage than low-wage consumers. As time becomes more costly, people seek religious practices that are less time-intensive and they want the “quality time” that religious human capital can provide. Clergy sensitive to their members’ changing needs often respond by adapting ritual practices accordingly, while others oppose such changes as “untraditional” or even “irreligious.” This process explains how large and persistent changes in the economic environment can generate and support institutional changes, schisms, and perhaps even new religions.
