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How does religious denomination affect household finance?

Eric Barker
August 25, 2010

Although the relationship between religion and economic development on the macro-level has been investigated, it is less clear how religious background influences economic attitudes and financial decision-making on the level of the individual or household, the micro-level. We use panel data from the extensive DNB Household Survey, covering the period from 1995 to 2008, to investigate whether – and through which channel – religious denomination affects household finance in the Netherlands. We find evidence that, in general, religious households care more about saving, are more risk-averse, consider themselves more trusting, have a more external locus of control, and have a stronger bequest motive. Furthermore, Catholics and Protestants have longer planning horizons, and Protestants and Evangelicals seem to have a greater sense of individual financial responsibility. Most of these factors matter for household financial decision-making, albeit to differing degrees. Using our religion variables as instruments for economic attitudes (and controlling for demographic and background risk characteristics), we demonstrate that the above-mentioned differences in economic beliefs and preferences explain the higher propensity to save by religious households in general and the lower investments in risky assets by Catholic households.

Source: “WHERE ANGELS FEAR TO TRADE: THE ROLE OF RELIGION IN HOUSEHOLD FINANCE” from Tilburg University Discussion Paper, No. 2009–34

Not a religious text but close.

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Title How does religious denomination affect household finance?
Author Eric Barker
Date August 25, 2010 6:58 PM UTC (13 years ago)
Blog bakadesuyo
Archive Link https://theredarchive.com/blog/bakadesuyo/how-does-religious-denomination-affect-household.16837
https://theredarchive.com/blog/16837
Original Link https://www.bakadesuyo.com/2010/08/how-does-religious-denomination-affect-househ/
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