Municipal spending and religious preferences

The economics of religion has begun to investigate questions relating religious preferences and economic outcomes that are determined at least in part by voting and similar decision making processes.  Ayman Reda (2010, “Religious and Economic Preferences: An Empirical Analysis of State Tax Rates and Public Spending,” International Economic Journal) investigates the question of whether religious preferences and affiliations affect government decision making regarding tax rates and spending for the U.S. States.  One of his motivations is to investigate a “Cultural Wars” thesis.  The question is whether governments, in their economic and fiscal plans, take “into consideration the demands and prescriptions of religious institutions and religious doctrines” (p. 300).   Framed slightly differently, “are the choices of political leaders and parties influenced by the religious inclinations of their constituencies?”

His basic strategy in addressing these questions was to add a religious variable to a standard set of explanatory variables for tax rates and two types of state spending, welfare and education.  The religious variable was the proportion of a state’s population which belonged to eight “conservative” denominations and the Catholic Church.   He finds that while this measure of “religiosity” has no effect on tax rates, it has a positive effect on state spending on education but a negative effect on welfare. 

The goal of the present paper is to do a similar investigation of the effect of religious identification on municipal spending, taxes, and the spending on certain specific categories, namely education, health, police, welfare, roads and debt.  The level of municipality considered is the metro area.  Data was collected from a national cross-sectional sample of 366 metropolitan areas in the United States.  The dependent variables were collected from the 2002 Census of Governments and were based on fiscal measures for the metro area.  These municipal-level measures were expenditures per capita for a metro area which includes all spending by a metro area divided by the municipal population, employment per capita which represented the number of full-time equivalent employees for a metro area divided by municipal population, taxes per capita for a metro area which includes all tax collections divided by municipal population. The source for the religious variables is the U.S. Religion Census: Religious Congregations and Membership Study, 2010 (Metro Area File).

Back to: Public Economics at the National, Regional and Local Levels

Previous Abstract | Next Abstract >>