The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Religion, Economics of

  • Laurence R. Iannaccone
  • Eli Berman
Reference work entry


Adam Smith invented the economics of religion, famously arguing for church-state separation on efficiency grounds since state religions become inefficient monopoly providers of religious services and because competition for monopoly status is often violent. Smith also developed theories of religious sects and sectarian violence. Modern applications of theory and data generally support Adam Smith’s conjectures. Recent work also explores: religious activity as a consumer choice, the demand for spiritual services, religious human capital and religious social capital, club models of sects – benign and violent – and the macroeconomic consequences of beliefs and religiosity.


Addiction Boulding, K. Capitalism Charitable Donations Clubs Fertility Firm, Theory of Free-Rider Problem Human Capital Intertemporal Utility Marriage and Divorce Mutual Aid Rational Choice Rationality Religion, Economics of Religious Capital Religious Economics Rent Seeking Sect Social Capital Social Cohesion Social Norms Stable Preferences Terrorism Weber, M. Women’s Work and Wages 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Laurence R. Iannaccone
    • 1
  • Eli Berman
    • 1
  1. 1.