The Blog is Back – The Market for Church Membership

by robekulick

Finals are over and I’m on vacation. Unfortunately, vacation in econ school means time to study for comps, but I should have time to do a lot of blogging which I’ve really missed. Anyway, first of all for the gentile readership out there, Merry Christmas! In honor of Christmas, I thought I’d do a blog post about a recent NBER working paper about competition between churches.

In “Substitution and Stigma: Evidence on Religious Competition from the Catholic Sex-Abuse Scandal,” Daniel Hungerman, an economist at Notre Dame, finds:

“This paper considers substituting one charitable activity for another in the context of religious practice. I examine the impact of the Catholic Church sex-abuse scandal on both Catholic and non-Catholic religiosity. I find that the scandal led to a 2-million-member fall in the Catholic population that was compensated by an increase in non-Catholic participation and by an increase in non-affiliation. Back-of-the-envelope calculations suggest the scandal generated over 3 billion dollars in donations to non-Catholic faiths. Those substituting out of Catholicism frequently chose highly dissimilar alternatives; for example, Baptist churches gained significantly from the scandal while the Episcopal Church did not. These results challenge several theories of religious participation and suggest that regulatory policies or other shocks specific to one religious group could have important spillover effects on other religious groups.”

http://www.freakonomics.com/media/manuscript.pdf

That a lot of people left the Catholic Church over the sex-abuse scandals isn’t particularly surprising. What’s more interesting is that the scandals don’t necessarily cause people to become non-believers. Also, it seems that people who have become frustrated with the Catholic Church seek out Christian sects that are quite dissimilar for Catholicism. Economists applying a typical merger style-analysis, would likely think of Episcopalianism as the closest substitute in the religion market for Catholicism as they are relatively similar in doctrine and practice. However, it seems that in the United States, those who leave the Catholic church are likely to choose more evangelical sects. For instance, Hungerman finds  “Catholics who leave for another faith are about 4 times as likely to become Baptists as Episcopalian.” According to the paper, other popular choices are Pentecostals, Jehovah’s Witnesses, and Mormons.

Perhaps most interestingly, Hungerman finds no general tendency for the scandals to reduce religious participation. He writes: “There is no evidence of a stigma effect; the negative shock on the Catholic Church does not appear to have led to a decrease in religious participation more generally.”

So why do people who leave the Catholic church choose to adopt such different sects? The paper doesn’t really provide an answer for this, but other economic work has posited that churches like the Episcopalian Church and the Catholic Church which are the official national churches of Europe have behaved like monopolies as a result of their institutional positions and thus have not responded to evolving consumer demand in the religious market.

This explanation probably has something to do with it, but with respect to the religious picture in America, there is probably also a socio-economic dimension. Episopalianism is associated with high-socio economic status and thus immigrants from Latin America and their descendants who leave the Catholic Church may not feel comfortable in the Episcopal Church. The appeal of very welcoming churches that cater to a wide spectrum of the population may be much more important than doctrinal consistency.

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