Saturday, March 03, 2018
The Influence of Religion on Personal Finance
Today's topic is going to be a teensy bit controversial, so I put up a picture of controversial person. Some other financial bloggers have commented that I am a Kong Hee like person when I give my talks, I am quite flattered by that remark. In fact, I followed Kong Hee even as an atheist when he talks about modern topics like postmodernism. There is something mesmerising about his speaking quality, something I was unable to experience even after spending 10 years with the Toastmasters movement.
The working paper is entitled Randomizing Religion : The Impact of Protestant Evangelism on Economic Outcomes by Bryan, Choi and Karlan. This paper is making huge waves in social science circles and have been mentioned by Tyler Cowen and the Economist.
Internal Care Ministries (ICM) collaborated with a team of economists to spread religious teachings to 6000+ Filipino families, then based on what was taught, the economists tracked their economic outcomes. This study would confirm the impact of religious values on economic outcomes.
To a personal finance geek like me, this is seriously awesome shit !
The religious values curriculum is covered by a pastor. There is also a livelihood segment on what good works should be where some common sense advice of money is taught. The researchers are highly meticulous and a large part of their work was done to disentangle the effects of religious values against livelihood advise.
The results are a goldmine that can lead to future study :
Having stronger religious values do, indeed, lead to higher incomes largely because it makes religious followers grittier. However, this effect does not translate to greater wealth, the researchers argued that there was no time to measure this effect.
However, religious values training made participants more aware about their relatively economic statuses and made believers a lot more discontent with their lot in life. Religious training reduces a participant's perception of well-being. ( These are poor Filipino villagers, after all. )
I am going to just stop here because I don't want to kick a hornet's nest and draw any conclusion that is not written in the working paper.
I leave it you readers to think about how your personal values has affected your relationship with money this weekend.
The effects of your religion and values cannot be discounted when you think about how they have shared your economic destiny.