Religiosity: Identifying the effect of pluralism

Abstract

Economists and sociologists have long disagreed over the effect of pluralism on religiosity, the question of whether the number religions in a society lessens or heightens people's beliefs and participation. The controversy stems from the omission of religion's role in legitimizing government, which has significantly biased previous estimates. We use a novel identification strategy that exploits the variation among countries in their proximity (cost of travel) to centers of universal religions of the world (Buddhism, Christianity, Islam). Whereas the results of OLS analysis tentatively suggest a negative association between pluralism and religiosity, estimates from the method of instrumental variables reveal that the direct effect of pluralism is positive. Our results support the argument that enhanced competition in the religion market would increase religiosity by offering believers a greater variety and quality of choices.