Religion Abates Income Shock

Though economists typically steer their research away from the spiritual realm, a new study released in August found a connection between active membership in a religious congregation and levels of consumption and happiness.

The study, entitled “Insuring Consumption and Happiness Through Religious Organizations,” was authored by Erzo F.P. Luttmer, assistant professor of public policy at the Kennedy School of Government, Rajeev H. Dehejia, visiting associate professor in economics, and Thomas DeLeire, an economics professor at Michigan State University.

Luttmer said that the study sought to explain whether or not membership in a religious congregation changes the degree to which people’s happiness and consumption are altered after an income shock.

Luttmer said the study found that blacks and whites respond differently to the same type of change in household income.

Among whites, those who are religious experience less of a change in consumption after a change in income than their non-religious counterparts, often because they receive financial assistance from the congregation.

The study also found that while the consumption patterns of blacks are not significantly affected by religious membership, faithful blacks experience less of a decrease in happiness after a decrease in income as compared to their non-religious counterparts.

Dehejia was hesitant to offer a comprehensive explanation for the study’s findings, though he did speculate that the sort of assistance black congregations provide, such as preparing meals for a congregant in need, might not have been measured in data collection.

Dehejia said that one of the study’s most striking findings was that even though religious whites experience less of a consumption decrease after a wage decrease, they are not necessarily any happier.

“We were motivated by the idea that there is no simple mapping from income to happiness,” Dehejia said.

Both Dehejia and Luttmer cautioned against applying the results of the study to explain the black response to hurricane Katrina, as newspapers like the Boston Globe and the New York Times have done.

“The type of shock that Katrina provides is an order of magnitude greater than the types of shock in our experience,” Luttmer said. “Whole congregations were disintegrated...The links between Katrina and our study are speculative.”

Wallace D. Best, assistant professor of African American religious studies at Harvard Divinity School, said he was not surprised by the study’s finding because religion is a central institution in African-American culture.

“There’s another stream of thought in African-American religious communities that suggests that material things do not matter at all and that black people, having a history of deprivation, have been taught that the absence of ‘things’ should not influence your happiness at all,” Best said.

—Matthew S. Lebowitz contributed to the reporting of this story.

—Staff writer Sarah E.F. Milov can be reached at milov@fas.harvard.edu.