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modeling religious group leaders’ preferences

Standard economics textbook models of markets assume that firms act to maximize profits.  In real life, of course, firms may have various objectives not related to profit (e.g., craftsmanship, community service), and firms might not even maximize (e.g., they satisfice or follow some other rule).  However, the profit maximization assumption is short, sweet, and, most importantly for the instrumentalist, it yields some pretty useful predictions about market outcomes.

My question for you:  what would be the counterpart in the as-yet-unwritten economics of religion textbook which seeks to provide a simplified version of religious market competition?

In case you didn’t know, there is no standard economic model of religious competition.  The closest thing would not really be a specific model but more of a convention to use Hotelling-like location models in which religious groups “locate” or “product differentiate” by requiring different degrees of commitment (strictness).  But while different papers frame competition as spatial competition, they make different assumptions about religious group leaders’ preferences.  In a couple of my own papers (one coming out in AJS, another coming out in Economica), I assume that denominations act to maximize membership size.  Barros and Garoupa (Econ Journal 2002) assume that a denominations seeks to maximize the welfare of its adherents and also considers a variation in which the denomination.  Montgomery (Rat&Soc 1996) assumes that the group’s behavior is determined by the “voice” of its members.

In real life, of course, different religious groups may have very different preferences from one another.  But let me clarify:  I am not asking you what religious groups actually seek to accomplish;  I am asking what is the best assumption to make in a textbook model.  Of the assumptions mentioned above, I like the one I use because I find it most useful for not only my own research interests but also for teaching students in my economics of religion class.  It allows for a model that captures religious market entry, regulation, and the forces that result in religious market pluralism and participation.

I acknowledge that the “best” choice for a textbook would depend on the purposes of the textbook writer, so please feel free to also offer what you think might be good objectives for such a model.

Written by mikemcbride

July 15, 2008 at 5:15 am

21 Responses

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  1. Not to be overly empirical, but wouldn’t a good objective be grounded in some sort of fieldwork among religious leaders and groups? The profit maximizing firm is obviously a fiction, but also obviously not entirely fictional – firms do pay a lot of attention to profits, and seem to work fairly hard to increase them. Does the same hold true for religions and membership?

    For example, it seems like a “membership maximization” model would make a lot more sense for a very evangelical religion (Scientology say) and a lot less sense for orthodox Judaism (who barely allow converts, and rarely seek them out except perhaps among secular Jews). Another way of saying this, is there a reason to think that all groups labeled as religious are really maximizing the same thing?

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    Dan Hirschman

    July 15, 2008 at 7:12 am

  2. Membership maximization is probably the process that I use as shorthand in my thinking. Is it Stark that demonstrates that even “non-evangelical” religions operate to maintain and/or increase the size of their base? A second related model might involve emphasis membership retention. This would operate well with the “strict churches are strong” assumption made by Iannaconne and would also allow for churches whose members become socially isolated, thus making new recruiting prohibitive. A third model might emphasize status maximization (internal status within the religious organization most likely) of the religious leaders; this model would make more sense in hierarchically organized religions and charismatic religions.

    In short, I have no idea what the textbook model might look like.

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    trey1

    July 15, 2008 at 1:09 pm

  3. A shorthand for this might be that churches want to maximize their chances for survival. For some religious organizations this means they seek to dominate the market by increasing overall share (e.g., churches with high levels of proselyting); but other churches maximize survival chances by finding a small corner niche – adopting a specialist identity. You should see different actions by different churches, depending on the kind of resources they have and their position in the market.

    The problem with my conceptualization of maximizing, of course, is that it doesn’t easily yield an equilibrium model.

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    brayden

    July 15, 2008 at 1:16 pm

  4. In this case, I really don’t think it’s a question of we squeamish sociologists being unwilling to commit to a “clean model.” As has been mentioned already, I’m not sure we can usefully think of all religious groups as maximizing the same things. Membership is important, of course, and if you *had* to pick one thing to focus on, that would probably be a good one. But I think that mainline groups are probably more interested in *not losing* members (i.e., they’d be quite happy with remaining the same size) while conservative or evangelical religions are probably more interested in gaining members. I wonder if the behavioral econ literature on loss aversion would be helpful here?

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    Steve Vaisey

    July 15, 2008 at 2:19 pm

  5. Your model presumes that religious groups are in competition with each other over prospective members. My suspicion is that (in the U.S.) the real clashes are between secular groups that oppose religious groups. Religious leaders of different groups often have more shared interests that are typically acknowledged…

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    russcoff

    July 15, 2008 at 2:23 pm

  6. Hi, I am a silent reader of your blog. I take the chance to congratulate you for it. Religion is not my field (I am a new PhD student in political science), but i find particularly interesting the idea of a model presuming the maximization of the members of religious groups. As you mentioned, such a model would obviously be a simplification of the reality, but it could explain or, at least, generate hypothesis about the reasons why for instance the Catholic Church bans the use of condoms even in countries with aids epidemics. However, it seems to my sense that the idea of modeling religious groups based on fixed preferences is more problematic or difficult than the widespread idea of modeling firms. Indeed, the economic market is a simpler environment (with its common rules and currencies) than let say the “cultural market” in which each actor’s construction of the reality could have more influence on their behavior (or the creation of their own parochial rules) than any shared rules. In fact, if we try to integrate less mainstream religious groups in the model by defining “religious group” in a way that integrates sects, this problem seems even more important. Maybe (and it is only a thought of mine… it worths what it is) such a model should be limited to well-organized older religious groups that would be more conscious (after repeated games) that they are in a competitive environment and that they must not only rely on their “truth” in order to grow or survive (marketing literature defines this as a “product-oriented behavior”), but they must expand or at least retain their members or other sources of funding by developing strategies based on their knowledge or their market segments (market-oriented behavior). Very inspiring topic!

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    Yannick Dufresne

    July 15, 2008 at 3:29 pm

  7. This is a cutting edge issue within the American protestant church. The primary metrics used instead of profit maximization have been either or both of income maximization or participation (measured in terms of number of person-hours spent on church activities). Some mega churches have realized that measuring these metrics isn’t helping to advance their goals.

    The harder to quantify metric that some (like Willow Creek) are now reaching for is something like the quality, harmony, and sustainability of community life (where “community” is defined broadly to include the happiness and fulfillment of both individuals, the local church, and the larger nation and world).

    The focal points are church doctrine. In most cases, the focal points have many levels of abstraction, with the highest levels being general enough for most anyone to agree on, and the lowest levels leading to the splits in denominations that used to seem important when cultural norms were still relatively important compared to legal norms in the United States.

    I don’t categorize a “church” that sets its focal point as a relative difference to another type of person or group of people as “religion,” but people call these types of groups religious all the time.

    An interesting point about such a metric is that it is not a substitute for profit maximization. It’s sort of orthogonal to profit.

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    Michael F. Martin

    July 15, 2008 at 3:52 pm

  8. These are all excellent comments. Because I teach a class on the economics of religion, I benefit tremendously from hearing others’ thoughts on this topic. Actually, when I teach the class, we always pause the lecture for a while to discuss what types of goals different religious groups have. Now I can bring in some of your comments into my class in the fall.

    I certainly don’t want to argue that maximizing membership is a good approximation of what all actual religious groups do. My own sense is that if groups can be thought of maximizing anything (which is itself questionable), they are maximizing a complex combination of goals. Aside from membership maintenance and/or growth, there is community influence, the well-being of members and community, political influence, and more, and each of these is weighted differently by different groups.

    For the sake of conversataion, I will mention that the maximizing membership assumption can be thought to capture that notion that any religious group must care about membership size to some degree or else it will be driven out of the religious marketplace. Thus, the assumption is not totally outlandish (maybe only partly outlandish?) in a model that seeks to explore the properties of a market at the level of a market.

    I will, however, repeat what I said earlier that all the points you all rasied are good ones. A lot more work will probably have to be done before there is a common willingness to accept one particular assumption.

    Yannick, You said, “Very inspiring topic!” This was an excellent pun, even if not intended. All I can say is, bless you.

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    mikemcbride

    July 15, 2008 at 5:06 pm

  9. “…any religious group must care about membership size to some degree or else it will be driven out of the religious marketplace.”

    This is definitely true, which is why if some objective maximizing assumption is necessary, this is the way to go. But my sense (as someone else who studies religion) is that you see a lot more behavior consistent with membership *satisficing* in the mainline denominations. That is, the implicit view seems to be that there’s a certain number of people we need participating here to have a viable and vibrant congregation, but beyond that number, it’s nice but not a huge priority. At that point, I imagine congregations invest more resources in providing quality-of-life-type services for existing members than in recruitment drives or evangelism.

    This would not hold, of course, for other religious groups with an explicit focus on numerical growth (like the LDS, JWs, Pentecostals, or evangelicals). In other words, I expect your model would explain the LDS case quite well, but the Methodist case much less well, except insofar as you will observe Methodist congregations fighting to maintain survival level.

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    Steve Vaisey

    July 15, 2008 at 5:39 pm

  10. For a text book, I’d offer a simplified where church leaders maximize a weighted sum of ideological purity and raw membership size. You can either formulate a religion with broad appeal (think mega churches) or you can be a purist (think of the Islamic teachers, who often have narrow followings).

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    fabiorojas

    July 15, 2008 at 6:11 pm

  11. You folks are missing (or maybe are just not stressing enough) the fact that some people prefer smaller churches where you feel like you know (and are known by) all the other members. Congregations are responding to cross-cutting pressures. If a model is going to be accurate, it has to somehow capture the multidimensional character of the preference structures. Individuals vary in their preference mix for key factors such as (1) community — knowing people, (2) dynamic preacher, (3) cultural & religious style (which itself varies qualitatively in many dimensions), (4) presence of various kinds of special programs for youth, singles, music, art, LGBT, divorced, couples, etc. Congregations cannot maximize all dimensions simultaneously and different congregations position themselves differently in the space. I’m not an economic sociologist, but this doesn’t seem that different from how other markets work, there is product differentiation and niching, it is never unidimensional.

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    olderwoman

    July 15, 2008 at 6:12 pm

  12. ps i forgot to say that some people value ideological exclusivity, as well, another force pushing against a unidimensional “the more the merrier” force. The same kind of force that leads some people to prefer unusual clothing or food or clubs or theories.

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    olderwoman

    July 15, 2008 at 6:15 pm

  13. I agree with OW’s take and that is (sorta) what I was trying to say in my earlier comment. If there’s anything being maximized, it’s their ability to survive. But given that one church’s appeal to potential consumers differs greatly from another church’s appeal, it’s impossible to determine if one key factor (e.g., membership growth) leads to survival. Omar’s earlier post about the article on churches as permanently failing organizations points out that some organizations are barely meeting the minimum number needed for survival (i.e., they’re barely satisficing). Further, I think that the assumption of membership maximization only applies to a very limited number of churches out there. Few churches could ever hope to dominate their local market let alone grow to the size of the Catholic church. Such a model would need to take into account the limited sizes of niches that these churches actually occupy. (Hey, anyone can survive if your church is optimally designed for a niche of 1!)

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    brayden

    July 15, 2008 at 6:22 pm

  14. I referenced membership retention in my post above as well and, upon reading other comments, definitely think it merits further investigation. With respect to cross-cutting preferences, I don’t think that churches are blind to this at all; witness the mega-church practice of splitting massive congregations up into smaller congregations that meet at regular times with one another to foster community building (and, some would argue, monitoring and sanctioning).

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    trey1

    July 15, 2008 at 6:40 pm

  15. trey1: Hopefully nobody thinks churches are any blinder than small businesses or movement organizations to the problems of locating themselves in a “market” space. All actors are capable of reflexivity, even if they are better or worse at dong it. And I think everyone knows there are plenty of church consultants out there who will help congregations identify their market niche. While the mega-churches grow for a reason, the sector of churches (in the US anyway) clearly is constantly differentiating and is not homogenizing. I agree that the huge Protestant churches tend to create small group options for just the reason you state, but it is also true that some “consumers” of Protestant religion don’t want to be in the mega-churches anyway. The question of why small churches can remain viable while small business generally cannot seems worthy of analytic inquiry, which I think was the initial point. I’m just saying that I think any valid theory of the process has to have some way of accounting for specialization and differentiation in a field, and cannot just be a theory of why some churches get big.

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    olderwoman

    July 15, 2008 at 7:34 pm

  16. Absolutely. I didn’t mean to say that the mega-church model was the only (or dominant) model. I agree with you totally.

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    trey1

    July 15, 2008 at 8:19 pm

  17. I’m really enjoying reading everyone’s comments.

    I want to throw out a distinction I didn’t make earlier but that helps clarify issues relevant to our discussion. When we think about a religious market and local religious groups competiing in that market, it is important to distinguish local congregations from, for lack of a better term, headquarters. For example, the local Catholic parish here in Irvine seeks to have a viable presence in the Irvine’s religious market, but the Pope at headquarters must think about multiple religious markets at once.

    Let me share an example of a case I’ve written about, though not on what I’ll say now. The LDS Church is openly committed to growth, but it grows better in some parts of the world than others: better in Latin America and parts of Africa, OK in some parts of Eastern Europe, and not so good in Western and Southern Europe. *This may give insight into other of its priorities.* The LDS “brand” is controlled to some extent by headquarters in Utah, and leaders at headquarters seek to maintain a large degree of simiilarity in policies and practices around the world. But this comes at a cost because it means that local congregations are less able to adapt to local religious market conditions. Thus, I’d suggest that the LDS Church leaders, while caring about growth, are not willing to sacrifice too much in variation in its “product” in order to increase growth. Hence, membership growth is not even the single most imporant goal of a Church that is one of the most committed to grow.

    The textbook model I had in mind when writing the post was of a single market and thus could not consider such issues. So I don’t consider this a damning point (no pun intended, OK, well maybe a little intended) wrt making a simple textbook model.

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    mikemcbride

    July 15, 2008 at 8:51 pm

  18. Not all religious groups are controlled by leaders. Many groups are, but some groups aren’t. My Zen group is run by consensus, Quaker-style. That consensus could be forced, in the beginning, by a charismatic founder (now retired). The current teacher, while beloved, could not push us where we didn’t want to go.

    We’re satisficing. We have a building and grounds to maintain, a teacher and employees to support, and we need enough members to keep that going. Outreach consisting of a website and monthly orientation sessions for interested newcomers is all we do. If you don’t want what we have to give, there’s no point pushing it on you.

    Quality rather than quantity; long-term over short-term. Plus the knowledge that we’re just an upaya, a means, and that other means fit other people and other times. Eventually our buildings will crumble and our lineage may die out. That doesn’t mean the end of the Dharma.

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    Zora

    July 16, 2008 at 12:39 am

  19. @mikemcbride

    If you haven’t already read Johnathon Spence’s “The Memory Palaces of Matteo Ricci,” then i recommend it to you. You’ll find an interesting historical analogy to your observations of the LDS church today.

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    Michael F. Martin

    July 16, 2008 at 2:31 am

  20. This seems relevant to modeling denominational motivations in the Christian tradition:

    http://inhabitatiodei.wordpress.com/2008/05/06/types-of-ecclesiology/

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    Mark K.

    July 16, 2008 at 9:21 pm

  21. Certainly agree with what you explained. Your explanation was certainly the easiest to fully grasp. I tell you, I generally get annoyed any time people talk about issues that these people plainly do not know about. You managed to hit the nail on the head and explained every thing without complication. Perhaps, people can get a sign. Will more than likely be back to get even more. Appreciate it

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    Buy Kodak Playsport

    October 13, 2010 at 2:16 am


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