Edited by William F. Shughart II, Laura Razzolini and Michael Reksulak
The fact that economics is capable of providing important insights into religion and religious behavior is certainly not original. Adam Smith, author of the Wealth of Nations (1776 ) and acknowledged founder of economics as a social science, first integrated the study of religious behavior with economics. In a far broader view than that of Marshall and his neoclassical contemporaries – appropriately called political economy – Smith studied the economic problems associated with the provision of religious goods and services. Smith’s analysis, while not providing a formal theory of monopoly provision of these products, revolved around incentive failures as characteristic of state-sponsored religious institutions. Modern investigations have greatly expanded the reach of economics in this regard. Beginning with Azzi and Ehrenberg (1975) and following Gary Becker’s astute observations on implicit markets and prices (for example, Becker 1981), economists and sociologists developed analyses around market structure (Ekelund et al. 1989), religious participation as cult behavior (Iannaccone 1992), rational behavior (Stark 1997) and comparative statistical studies of the economic impact of types of religions (Barro and McCleary 2005). Economic theorists have also focused on religious demands based upon risk preferences (Durkin and Greeley 1991) and on self-insurance (Beard et al. 2011).
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