Contagious Crowds and Rational Faithfuls: A Club Theory Approach

Abstract

This study investigates the observed resurgence in religious beliefs seen across many societies during the COVID-19 pandemic. Using the economic theory of religious club, we model religious participation during the pandemic as a mechanism for alleviating the financial distress associated with the health distress from the pandemic. Our model sees religious organisations as public goods providers, especially when governments and markets are inefficient. Using data from the COVID-19 National Longitudinal Phone Survey in Nigeria, we investigate the economic motivation for religious intensity during the COVID-19 pandemic. To address endogeneity concerns, we exploit geographic variables of temperature and longitudes as sources of COVID-19 risk. Overall, health distress stimulates religious intensity. Consistent with the economic theory of religious clubs, adverse health shocks stimulate financial distress, and the effect is stronger among religious participants. Similarly, people see God and not the government as a source of protection against COVID-19. Our recommendations support an expanded role for religious networks in health care delivery and more public funding to attenuate the post-pandemic resurgence of social violence in economically distressed regions.