Does religion influence the household finance? Evidence from Europe
Studies in Economics and Finance
ISSN: 1086-7376
Article publication date: 18 October 2023
Issue publication date: 3 June 2024
Abstract
Purpose
This paper aims to examine the influence of religious backgrounds and religiosity on three dimensions of household finance (the decision to hold secured debt, the likelihood of being in a state of financial distress and the likelihood of being in a state of financial well-being) across a large sample of European countries.
Design/methodology/approach
The study uses data from the European Union Statistics on Income and Living Conditions (EU-SILC) data set, spanning from 2004 to 2018. The authors conduct regression analysis to examine the relationship between religion and household financial choices.
Findings
The study finds that belonging to a predominantly Catholic or Orthodox (Protestant) country is negatively (positively) associated with the likelihood of holding a mortgage. Belonging to a mostly Catholic (Protestant) country is negatively (positively) associated with the likelihood of being in a state of financial distress. Belonging to a predominantly Catholic (Protestant) country is positively (negatively) associated with the likelihood of being in a state of financial well-being. These relationships remain robust after controlling for a large number of demographic and economic variables.
Originality/value
In this paper, the authors analyze for the first time the impact of religion on household finance in a wide range of European countries. It is also the first time that the EU-SILC database, which aggregates data on more than three million European households, is used for the study of this topic.
Keywords
Acknowledgements
The authors are grateful to Eurostat for offering the EU-SILC dataset. “The Global Platform for Higher Education in Emergencies-Portugal” for funding the main author. Since the acceptance of this article, the following author has updated his affiliation: Rashed Isam Ashqar has joined Al-Zaytoonah University of Science and Technology, Salfit, Palestine.
Citation
Ashqar, R.I. and Lobão, J. (2024), "Does religion influence the household finance? Evidence from Europe", Studies in Economics and Finance, Vol. 41 No. 2, pp. 286-311. https://doi.org/10.1108/SEF-02-2022-0107
Publisher
:Emerald Publishing Limited
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