The Value of Religion

I just had a great conversation today with one of my classmates about religion. We primarily focused on Christianity and Islam (we had one representative of each), but also touched on some other religions as well. Some of the topics we covered included: What are the key differences between Christianity and Islam? What is religion? How can we know what is true? What role does religion play in our lives? What is the nature of salvation? What must we do to be saved?

We also discussed Christian theological doctrines such as justification, sanctification, providence and the Trinity. It certainly was a tremendously thought-provoking conversation that lasted about four hours. I cannot think of a better way to have spent my time.

Both of us agreed that religion touches upon the things that are most valuable in life. Family, love, death, joy, contentment, eternity – concepts that sometimes get lost here at school as we focus our thoughts on indifference curves and utility functions. While economics certainly sheds some light on theological issues, it also runs the danger of becoming a countervailing paradigm for viewing the world that sometimes obscures the true and the beautiful. Economists often make simplifying assumptions about human behavior – self-interest, pure rationality, etc. that make people seem as though they are pure calculating machines, adding up how many “utils” (or “jollies” as Prof. Iannaccone likes to call them) they can gain from their behavior and exchange.

While these simplifying assumptions are powerful tools for viewing the world and are usually very successful at approximating human behavior, there runs a danger of believing these assumptions to be completely accurate descriptions of human behavior on all levels. Fortunately for all of us, experimental economics and everyday experience both show this to be frequently false. A good economist is one who knows not to confuse the model with the reality it describes. As Bryan Caplan was saying in our micro class last night – “experiments indicating that people are not always selfish probably means that people aren’t always selfish”. Seems to make good sense to me…

I do think economics has some great insights to offer in understanding religion. Ultimately, economics is the study of how incentives motivate people and observing the things that people value. Religions certainly motivate people in very powerful ways and should therefore be under the purview of economics. Apparently, I’m not the only one who thinks this way. Larry Iannaccone, a professor here at GMU, is pioneering the field of the Economics of Religion. GMU is a fantastic place to study this topic and Dr. Iannaccone has just established CESR (Center for the Economic Study of Religion) that is turning into one of the best places in the world to study this topic. There seems to be a growing interest in this field. Last semester, the econ department at GMU hosted a debate on “Is Religion Rational? The Economics of Faith” in which Profs. Iannaccone and Caplan debated this great topic. It was a great debate that had over 300 students in attendance.

I'm very excited by these developments and hope to eventually not only study religion, but also culture using the lens of economic analysis...

Questions: Is religion rational? Is it valid to study religions using the tools of economic analysis? What is the definition of “religion”? What similarities do religions have in common? How do religions incentivize people? What are the most important things in life to you? How have you decided what you value most? How do cultures affect people's behaviors and incentives? Should culture matter to economists?