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Religious Participation Versus Shopping: What Makes People Happier?

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Religious Participation Versus Shopping: What Makes People Happier? 1 RELIGIOUS PARTICIPATION VERSUS SHOPPING: WHAT MAKES PEOPLE HAPPIER? Danny Cohen-Zada* and William Sander** May 24, 2010 Abstract. Previous studies indicate that there is a positive correlation between religious participation and happiness. However, it is not necessarily the case that religious participation has a causal effect on happiness. In this study, we try to test whether religious participation affects happiness. Following previous research, we use the repeal of blue laws in states to identify the relationship between religious participation and happiness. We show that the repeal of blue laws can be used as a valid instrument for estimating the effect of church attendance on happiness. Further, we find that religious participation does indeed have a positive effect on happiness. The primary data source for our study is the National Opinion Research Center’s “General Social Survey.” Keywords: Religious participation; Happiness; Blue laws. _____________________________________ *Department of Economics, Ben-Gurion University, Beer-Sheva 84105, Israel (e- mail: [email protected] ). **Department of Economics, DePaul University, Chicago, IL 60604, USA ([email protected]). 2 RELIGIOUS PARTICPATION VERSUS SHOPPING: WHAT MAKES PEOPLE HAPPIER? 1. Introduction There is a relatively large literature on the determinants of happiness in economics and other disciplines. Frey (2008), Frey and Stulzer (2002), Layard (2005) and others provide useful surveys of some of the literature on happiness studies by economists. One of the key findings is that although economic growth and higher income buys some amount of happiness, the effect is either small or zero once a certain level of economic prosperity has been reached (Oswald, 1997). Some of the other determinants of happiness have been shown to be relative income (the rich are happier than the poor), education (higher levels of education increase happiness), race (whites are happier than blacks), family relationships, work (unemployment has a relatively large negative effect), health, personal freedom, community and friends, and personal values such as religious beliefs (also see Kahneman and Krueger, 2006; Stevenson and Wolfers, 2008). Blanchflower and Oswald (2007) show that age has a u-shaped effect on happiness. Although most studies have shown that women are happier than men, Blanchflower and Oswald (2004) and Stevenson and Wolfers (2009) find that this has become less the case over time. Studies also indicate that religious participation tends to be positively associated with happiness (Ellison, 1990; Kahneman and Krueger, 2006; Layard, 2005; Okulicz-Kozaryn, 2009; Shehan, Bock, and Lee, 1990; Stevenson and Wolfers, 2008). Although there is a positive correlation between religiosity and 3 happiness, the effect is not necessarily causal. Research by Azzi and Ehrenberg (1975), Barro and McCleary (2003), Gruber, 2005, and McCleary and Barro (2006) indicate that it could be the case that religiosity is endogenous with variables like happiness. Frey (2008) also makes the important point that many variables that are used to estimate happiness could be a result of happiness or correlated with determinants of happiness. In a recent study, Powdthavee (2009) shows that income is endogenous with happiness that buys more happiness than other studies have estimated. In this paper, we explore the causal effect of religious participation on happiness. following Gruber and Hungerman’s (2008) (hereafter GH) novel approach (the repeal of so-called blue laws) to identifying the effects of religious participation on alcohol abuse and illegal drug use. We show that an exogenous decline in religiosity as measured by church attendance has a negative effect on happiness, especially for married women. This is an important topic for research for several reasons. First, previous studies have shown that repealing blue laws has had a negative effect on church attendance and negative effects on alcohol abuse, drug use, and political participation (Gruber and Hungerman, 2008; Gerber, Gruber, and Hungerman, 2008). Second, it is not clear whether religious activity is a cause or an effect of happiness. If religious activity causes happiness, there might be cause for concern because of declines in membership and attendance (see Wuthnow, 1997). Further, it is important to examine factors that might result in declining happiness for women (Blanchflower and Oswald, 2004; Stevenson and Wolfers, 2009). 4 The paper is organized as follows. First, we discuss the data that are used in our study. Second, our empirical strategy is developed. Third, the empirical results are presented. The paper closes with a brief discussion of the findings. 2. Religiosity, Happiness, and Shopping Following the economic approach to the allocation of time (Becker, 1976), an increase in the opportunity cost of attending church (by reducing prohibitions on retail activity on Sundays) should result in lower levels of church attendance other things being equal and more shopping on Sundays. Further, as the incentive to allocate less time to church and more time to other activities (shopping, work on Sundays, etc.) increases, there may be an even greater (social multiplier) effect on how households allocate their time (Becker and Murphy, 2000). Although utility-maximizing households might allocate less time to religion and more time to other activities (at least on Sundays), it does not necessarily follow that this leads to higher levels of happiness. Research in behavioral economics and other disciplines suggest that although individuals try to maximize “decision utility,” they do not necessarily maximize “experienced utility” (Kahneman and Thaler, 2006). There are many possible reasons for this including incomplete information, time inconsistent behavior, errors in projecting the future, and problems of self-control. Kahneman and Kruger (2006) and Kahneman and Thaler (2006) provide good reviews on this literature. Other related studies include Frank (1988 and 1999), Gruber and Mullainathan (2002), Laibson (1997), O’Donogheu and Rabin (1999), Offer (2006), Thaler and Benartzi (2004), Thaler and Shefrin (1981), and Thaler and Sunstein (2003 and 2009). 5 This literature indicates that broadening the choice set of economic agents or lifting a constraint from their choice set does not necessarily imply an increase in their utility or their happiness. Thaler and Sunstein (2009) provide many examples of this . For example, they show that a Swedish plan that provided more choice options for pensions resulted in poorer choices. They also show that more choice in health care programs can result in “dumbfounding” seniors in the United States. They provide many simple examples as well such as the ready availability of snacks that can result in excessive consumption of them. Also, Frank (1999) and Layard (2005) argue that higher income results in competitive pressures to acquire a higher status in consumption relative to others. This results in a continual escalation in consumption standards that damages well-being. An example that is directly relevant to this study is that women have made large gains over time in increasing their earning ability and earnings both absolutely and relative to men in the United States. At the same time, they have not gained in happiness. Further, their level of happiness relative to men (who have declining economic status relative to women) has actually decreased (Blanchflower and Oswald, 2004; Stevenson and Wolfers, 2009). Similarly, imposing new constraints on an agent’s choice set does not necessarily imply a decrease in their utility or happiness. For example, Gruber and Mullainathan (2005) find that cigarette taxes seem to make smokers happier because at least some smokers have present-biased preferences or a problem of self-control. On the other hand, restrictions on freedom (e.g., to practice one’s religion) tend to have a negative effect on happiness (Frey and Stutzer, 2002). Also, Thaler and Shefrin (1981) and Thaler and Benartzi (2004) show that because individuals lack self-control that need help in making decisions regarding savings. 6 Regarding the focus of this paper, increasing the opportunity cost of church attendance should result in lower levels of church attendance. Further, increasing the opportunities for shopping on Sundays and working on Sundays should result in a reallocation of more time to these activities (and other activities that are indirectly related to working and shopping). If one goes back in time, Sundays were suppose to be “a day of rest” after six days of work. This was partly a result of Christian influences that date back to early times. So-called “blue laws” that restricted retail activity and other activities were one outcome of this influence (see McCrossen, 2000). Thus, it is also possible that repealing blue laws also might also result in making Sundays less of a special day and, perhaps, less of a source of happiness. 3. Data The primary data source for this study is the National Opinion Research Center’s “General Social Survey’ (GSS). The GSS is a cross-sectional national survey of individuals in the United States who are at least eighteen years old and live in a non- institutional setting. It has been undertaken either annually or biannually since 1972. The GSS has been one of the key data sources for research on happiness in the United States. Following GH, we select respondents who either live in states where there was a discrete clear and significant change (repeal) in the prohibition of retail activity (so- called blue laws) on Sundays for the 1973 to 1998 period or where there was no change at all. This approach leaves us with respondents from sixteen states: ten states with policy changes (Indiana, Minnesota, North Dakota, Tennessee, Texas, Virginia, and Vermont) and six states which serves as controls since policy did not change 7 during this period (Florida, Iowa, Kansas, Ohio, Utah, and Washington). 1 Data for the exact year blue laws changed in a state are excluded because it is not clear what effect they would have the year of change. We also use data for Catholics and Protestants because they are more likely to attend church on Sundays.
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