Why Do Inefficient Black Churches Survive?

Abstract

Why do Black American consumers continue to reflect higher rates of church attendance than the remainder of the U.S. population, and continue to obtain a significant amount of services from Black churches? When we hypothesize that the implicit prices of services that are produced by Black churches are higher than the price of low-cost substitute services, the preceding question raises curiosity all the more. The logical follow-on question is, “Why do Black churches, which appear to be inefficient in the production of services, continue to survive?” The analysis that is presented in this paper employs Consumer Expenditure Survey and American Time Use Survey data to reveal answers to these questions in the context of consumer optimization theory. We determine that, to answer these questions satisfactorily, one cannot overlook the role of culture.

Keywords: Black Church, church services, prices, consumer optimization, cultural rigidities

JEL Classification: Z120, D120, D40