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Afterlife incentives in charitable giving

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There is an expanding literature that examines the influence of religion on economic behaviour. Researchers typically do not distinguish among religions, masking important variation across doctrines. Our article adopts a typology of religions based on the construct of salvific merit. Major religious doctrines are ordered based on their linkage between charitable behaviour in this life and condition in the afterlife. Using the Center on Philanthropy Panel Study (COPPS), we exploit variation in household marginal tax rates (a subsidy to charitable giving) to test the influence of major religious doctrines on charitable giving. We find that charitable giving by adherents to high-salvific-merit religions are less sensitive to changes in charitable subsidies. Adherents to low-salvific-merit religions behave more like nonreligious households. Our results suggest that religious households optimize according to specific doctrines rather than a broad notion of religion.
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Keywords: COPPS; L30; N32; N42; charitable giving; incentives; religion

Document Type: Research Article

Affiliations: Department of Economics,Samford University, 800 Lakeshore Dr.Birmingham 35229, USA

Publication date: 2013-07-01

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