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Two Sides of a Medal: the Changing Relationship between Religious Diversity and Religiosity

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Religious Market Theory assigns basic market principles to the market for religion. The derived supply-side model proposes that religiosity is higher on a competitive market, characterized by high religious diversity. Churches will provide higher quality goods compared to monopolistic churches. The demand-side model, originating from the Secularization Hypothesis, suggests that the establishment of new churches casts doubt on the existing religion, which reduces overall religiosity. I find a negative linear relationship between religious diversity and religiosity which supports the demand-side model. However, high levels of income and democracy mitigate this effect. For high levels of education and immigration, the relationship even turns to positive. The demand-side model seems to dominate in less-developed countries. This effect appears to vanish in the most industrialized countries.
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Keywords: D4; O1; Z12; attenuating effects; demand-side; interaction; supply-side

Document Type: Research Article

Affiliations: Department of Economics, University Trier, 15, Universitaetsring, 54286 Trier, Trier, Germany

Publication date: October 2, 2014

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