The 'Sect Effect' in Charitable Giving: Distinctive Realities of Exclusively Religious Charitable Givers

30 Pages Posted: 9 Dec 2007

See all articles by Russell N. James

Russell N. James

Texas Tech University

Deanna L. Sharpe

University of Missouri at Columbia

Abstract

An examination of the charitable giving behavior of 16,442 households reveals intriguing patterns consistent with the club-theoretic approach to religious sect affiliation. The club-theoretic model suggests that individuals with lower socioeconomic standing will rationally be more likely to align themselves with exclusivistic sects. Because sect affiliation is also associated with more obligatory religious contributions, this approach generates novel predictions not anticipated by standard economic models of charitable behavior. Traditional analysis of charitable giving can mask the "sect effect" phenomenon, as low-income giving is dwarfed by the giving of the wealthy. However, the application of a two-stage econometric model - separating the participation decision from the subsequent decision regarding the level of gifting - provides unique insights. Basic socioeconomic factors have significant and opposite associations with different categories of giving, calling into question the treatment of charitable giving as a homogenous activity and supporting the understanding of sect affiliation, and potentially religious extremism, as rational choice phenomena.

Suggested Citation

James, Russell N. and Sharpe, Deanna L., The 'Sect Effect' in Charitable Giving: Distinctive Realities of Exclusively Religious Charitable Givers. American Journal of Economics and Sociology, Vol. 66, No. 4, pp. 697-726, October 2007, Available at SSRN: https://ssrn.com/abstract=1061816 or http://dx.doi.org/10.1111/j.1536-7150.2007.00536.x

Russell N. James (Contact Author)

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

Deanna L. Sharpe

University of Missouri at Columbia ( email )

Consumer and Family Economics
Columbia, MO 65211
United States
573-882-9652 (Phone)
573-884-8389 (Fax)

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