Religious Activity and Financial Behavior: Evidence from Dutch Household Survey Data

Abstract

We investigate the linkages between religious life and financial decisions using detailed survey data from a sample of Dutch households. Controlling for a large number of demographic characteristics and background factors, we show that adherents to the Protestant and, at a lesser extent, Catholic denominations exhibit a lower degree of financial risk aversion and are more likely to invest in stocks, options and bonds. Nevertheless, these effects become weaker among Christian respondents with stronger beliefs in God. Muslims also participate in risky financial markets, but at the same time, they are significantly less probable than Christians to own a formal bank account. Religious practice, as measured by the frequency of church attendance and pray, does not seem to significantly matter for households’ financial decisions.