TY  - JOUR
AU  - Gruber,Jonathan
TI  - Pay or Pray? The Impact of Charitable Subsidies on Religious Attendance
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10374
PY  - 2004
Y2  - March 2004
UR  - http://www.nber.org/papers/w10374
L1  - http://www.nber.org/papers/w10374.pdf
N1  - Author contact info:
Jonathan Gruber
MIT Department of Economics
E52-355
50 Memorial Drive
Cambridge, MA 02142-1347
Tel: 617/253-8892
Fax: 617/253-1330
E-Mail: gruberj@mit.edu
AB  - The economic argument for subsidizing charitable giving relies on the positive externalities of charitable activities, particularly from the religious institutions that are the largest recipients of giving.  But the net external effects of subsidies to religious giving will also depend on a potentially important indirect effect as well: impacts on religious participation. Religious participation can be either a complement to, or a substitute with, the level of charitable giving.  Understanding these spillover effects of charitable giving may be quite important, given the existing observational literature that suggests that religiosity is a major determinant of well-being among Americans.  In this paper I investigate the impact of charitable subsidies on a measure of religious participation, attendance at religious services.  I do so by using data over three decades from the General Social Survey, as well as confirming the impact of such subsidies on religious giving using the Consumer Expenditure Survey.  I find strong evidence that religious giving and religious attendance are substitutes: larger subsidies to charitable giving lead to more religious giving, but less religious attendance, with an implied elasticity of attendance with respect to religious giving of -0.92.  These results have important implications for the debate over charitable subsidies.  They also serve to validate economic models of religious participation.
ER  -