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Faculty of Economics

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Iyer, S., Velu, C. and Weeks, M.

Divine Competition: Religious Organisations and Service Provision in India


Abstract: This paper examines religious and non-religious service provision by religious organisations in India. We present a stylized Hotelling-style model in which two religious organisations differentiate hemselves on the strength of religious beliefs in order to compete in attracting adherents. We show in the model two central predictions: first,that the organisations will differentiate themselves on the strength of religious beliefs. Second, that in equilibrium, economic inequality makes the organisations increase their provision of non-religious services. To test this, we present unique primary survey dataon the economics of religion, collected by us between 2006 and 2010 from 568 Hindu, Muslim, Christian, Sikh and Jain religious organisations spread across 7 Indian states. We use these data to demonstrate that the organisations have substantially increasedtheir provision of non-religious services. We also provide quantitative evidence based oneconometric testing to highlight that religious organisations are differenting themselves on the strength of religious beliefs with respect to other organisations, and are also providing higher education and health services as economic inequality increases in India.

Keywords: Economics of Religion, Service Provision, Hotelling Model, Inequality, India

JEL Codes: Z12

Author links: Sriya Iyer  Melvyn Weeks  


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