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Amaan's avatar

How do economic downturn affect religiosity in countries with strong safety nets?

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Vivek Iyer's avatar

Religion is a service industry. If it focuses on providing 'normal'- i.e. income elastic- goods and services- it flourishes with rising prosperity. Hinduism used to be a 'Giffen good' for my class. If your income and life-chances shrank, you consumed more of it. If you became richer you became less observant. Then, suddenly, Religious goods and services were remarketed for a rising middle class. Going on pilgrimage was like going on holiday to a nice resort. I recall asking a Bihari shopkeeper in Delhi where the nearest temple was. He recommended the new Swaminarayan temple but mentioned that though it was very clean, still prayer there was efficacious. In other words, orthopraxy was no longer associated with dirt and beggars and flies.

What explains different income elasticities for religion in different regions is average family size. There is a consumption externality for family worship as opposed to individual observance.

It must be said, when things are utterly dire, demand for Religion collapses along with everything else. Such has not been the case almost everywhere during my lifetime.

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