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Racial Group Affinity and Religious Giving: Evidence from Congregation-Level Panel Data

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  • Dimitrova-Grajzl Valentina

    (Virginia Military Institute, Lexington, VA, USA)

  • Grajzl Peter

    (Department of Economics, Washington and Lee University, 204 West Washington St., Lexington, VA 24450, USA and CESifo, Munich, Germany)

  • Guse A. Joseph

    (Department of Economics, Washington and Lee University, Lexington, VA, USA)

  • Smith J. Taylor

    (Georgia Gwinnett College, Lawrenceville, GA, USA)

Abstract
Since giving to religious organizations constitutes a substantial portion of total charitable giving, an understanding of the determinants of religious giving is a vital policy concern. Drawing on a novel congregation-level panel dataset, we examine whether religious giving is driven by preferences for racial group affinity, that is, loyalty to one’s own racial group. To address endogeneity concerns, we combine a fixed effects estimation framework with an instrumental variable approach. We find robust evidence consistent with the racial group affinity motive: a decrease in the percent of whites in the local community is ceteris paribus associated with a decrease in the total giving receipts collected by predominantly white congregations. The magnitude of this effect does not vary with the extent of racial residential segregation in the community. The effect, however, is driven by the congregations in urban (as opposed to rural) communities. We offer a possible explanation for this result.

Suggested Citation

  • Dimitrova-Grajzl Valentina & Grajzl Peter & Guse A. Joseph & Smith J. Taylor, 2016. "Racial Group Affinity and Religious Giving: Evidence from Congregation-Level Panel Data," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(2), pages 689-725, April.
    • Handle: RePEc:bpj:bejeap:v:16:y:2016:i:2:p:689-725:n:16
    DOI: 10.1515/bejeap-2015-0131
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    1. Andreoni, James & Payne, A. Abigail & Smith, Justin & Karp, David, 2016. "Diversity and donations: The effect of religious and ethnic diversity on charitable giving," Journal of Economic Behavior & Organization, Elsevier, vol. 128(C), pages 47-58.

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    More about this item

    Keywords

    religious giving; racial group affinity; diversity; congregations;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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