When the economy goes down, do people get up and go to church?  Do they pray more?  Does domestic violence increase during times of economic stress and does religion temper this finding?  These are the motivating questions behind a series of research projects being conducted by Dr. Wafa Hakim Orman, an associate professor in the Department of Economics, Accounting, and Finance at the University of Alabama in Huntsville.  Not only does Prof. Orman reveal the religious effects of economic crises, but she also provides one of the most clear and pithiest explanations of the 1980s farm crisis and 2007 housing crisis that you will hear, a double bonus!

Our journey begins with Dr. Orman’s intellectual path to the study of economics and religion.  While we have featured a number of economists of religion on past shows, it is always interesting to discover how economists ended up studying a topic not necessarily associated with that discipline.  She traces her interest to a visit by Eli Berman (a previous RoR guest) to the University of Arizona wherein she was fascinated by his theory of religious club goods and collective action, and how Eli’s findings prompted new ways of thinking about her own research on open source software.  Throughout our entire interview, Wafa provides a number of insights as to how she came to discover new avenues of inquiry, providing great lessons for undergraduates and graduate students looking to craft their own research projects.

We then move to a discussion of economic crises and Prof. Orman lays down the causes of the 1980s farm crisis that had its origins in cheap money in the 1970s.  This discussion alone is worthy of our listeners’ interests, but then we take a look at how this economic downturn in rural areas may have impacted religiosity.  She notes that her ideas for this study came from Daniel Chen’s examination of economic turmoil in Indonesia and how this motivated many individuals there to join Koran study groups for emotional and resource support during troubled times.  Interestingly, the social networks that developed in these religious groups helped poor individuals gain access to credit later on, thus attendance at religious services is not just a spiritual or psychological palliative, but provides tangible benefits via the club good model of religion.  Wafa then details her own study of religious attendance during economic crisis, explaining how she set up her comparisons and obtained data.  We discover that religious attendance did increase following the downturn in commodity prices and farmland foreclosures in the early 1980s and the results were most pronounced in the areas where this was most severe.  Frequency of prayer showed slightly less increase, but she notes there were data limitations with the General Social Survey’s measure of this variable.  She also discusses how her study was augmented by a “difference within differences” methodological approach wherein she compared religious behavior of government employees (who were not affected by exogenous price commodity shocks) and found that the farm crisis had little impact on their church attendance.

We then take this study to a more contemporary time with an examination of the 2007-08 housing/financial crisis.  Again, Prof. Orman nicely summarizes the causes of this economic event and observes that this provides an additional test of her findings regarding the farm crisis.  Unlike the problems that beset the agricultural sector in the 1980s, the housing crisis was felt more dramatically in urban and suburban areas, particularly in the Southwest part of the United States and Florida.  As with her earlier results on the farm crisis, we once again see religious attendance increasing in the areas hardest hit by housing foreclosures.  When prompted to speculate as to whether individuals are seeking emotional solace or trying to build social networks by returning to church during these economic downturns, Wafa says that the data cannot really help us sort out that question — an example of a social scientist being truly humble about what her study says and not taking speculation beyond what the empirics can tell us.

We then finish off with some thoughts on additional projects Wafa is conducting, including a fascinating study of how economic downturns may impact intimate partner (domestic) violence.  The operating theory is that when individuals are under financial stress they will often express it is ways that are physically violent.  Prof. Orman’s study with two academic nurses (and one who actually worked with domestic abuse victims) indicate that there was an uptick in such cases in regions of Florida that were most severely impacted by the 2007-08 crisis.  Wafa takes this one step further to see if religion had any impact in tempering these outcomes and does find that in regions where religiosity was more intense, there was less domestic abuse.  Using Google searches on key religious terms as a variable to tease out spiritual interests, she also finds a complex endogenous relation between economic crisis, domestic abuse, and religious faith.  We finish off with some of Wafa’s thoughts about the things that have most surprised her during the course of her studies into the economics of religion.  She notes that even when various activities may appear to have no rational purpose, using economics to understand the utility function and constraints of individuals actually reveals how “meaningless rituals” may actually have a strong rational basis.  Recorded: February 15, 2016.

 

RELATED LINKS

Prof. Wafa Hakim Orman’s biography at the Department of Economics, Accounting, and Finance at U of Alabama Huntstville.

A select listing of Prof. Orman’s published and working papers.

RELATED PODCASTS

 Charles North on Religion, Economic Development, and the Rule of Law.

Michael McBride on Religious Free-Riding and the Mormon Church.

Michael McBride on the Economics of Religious Leadership.

Larry Iannaccone on Sacrifice, Stigma, and the Economics of Religion.

Eli Berman on Religious Terrorism.

Peter Leeson on Witch Trials and Human Sacrifice.

Carrie Miles on Religion, Gender, and Missionaries.

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One Response to “Wafa Hakim Orman on Religion and Economic Crises”

1. UAH economics professor sets out to prove link between religiosity and financial crises « Pen N Sword says:

   March 29, 2016 at 9:07 pm

   […] her research for publication. She also recently discussed her findings on the popular podcast, Research on Religion, hosted by Tony Gill, and she plans to present them at the upcoming Association for the Study of […]

   Reply