Competition and the Strategic Choices of Churches

Abstract

In this paper, we examine how the decisions of churches are impacted by the decisions of rival churches. Using a novel data set of Christian churches in two suburban Nashville, TN counties, we estimate a model of strategic interaction, based on empirical models of discrete games, which accounts for the location and denomination of churches. We focus on a church's decision of whether to provide a weekday child care program. Empirical evidence indicates that churches compete more strongly with nearby same-denomination churches than with different-denomination churches. These effects diminish with distance. Using our estimates, we conduct counterfactual simulations to examine the impact of an increase in the number of church adherents, the number of preschool aged children, and we also remove for-profit providers from the sample.

Keywords: nonprofits, churches, strategy, discrete games, day care

JEL Classification: L10, L30, Z12