Religiosity and income: a panel cointegration and causality analysis. Issue 30 (27th June 2017)

• Record Type: Journal Article
• Authors: Herzer, Dierk; Strulik, Holger
• Is Part Of: Applied economics. Volume 49:Issue 30(2017)
• Page Start: 2922
• Page End: 2938
• Publication Date: 2017-06-27
• Subjects: Religiosity -- church attendance -- income -- panel cointegration -- causality; N30 -- O11 -- C23; Economics -- Periodicals; 330
• DOI: 10.1080/00036846.2016.1251562
• Languages: English
• ISSNs: 0003-6846

Abstract

ABSTRACT: In this article, we examine the long-run relationship between religiosity and income using retrospective data on church attendance rates for a panel of countries from 1930 to 1990. We employ panel cointegration and causality techniques to control for omitted variable and endogeneity bias and test for the direction of causality. We show that there exists a negative long-run relationship between the level of religiosity, measured by church attendance, and the level of income, measured by the log of GDP per capita. The result is robust to alternative estimation methods, potential outliers, different samples, different measures of church attendance and alternative specifications of the income variable. Long-run causality runs in both directions, higher income leads to declining religiosity and declining religiosity leads to higher income.