The Economics of Religion: A Review

This article reviews economic research on religion undertaken in recent decades. Adam Smith [1904 (1776)] wrote extensively on the behavior of religious organizations in The Wealth of Nations , but the subject was thereafter absent from economic research until the late twentieth century. Contemporary research now recognizes that religious people not only espouse doctrines and beliefs but also undertake important resource-consuming and resource-producing activities. I begin with a section on the nature of religious movements, outlining the canonical club good model of Iannaccone (1992). I then draw on recent platform-economics models to reinterpret religious movements as platforms: organizations that facilitate and govern relationships—most notably communities—and appropriate a share of the value generated by these interactions. I address the demand for religion and the determinants and consequences of religious values and beliefs. Finally, I review research on the links between religion and politics.