Church Competition, Religious Subsidies and the Rise of Evangelicalism: a Dynamic Structural Analysis

Raphael Corbi () and Fabio Miessi Sanches ()

No 2022_09, Working Papers, Department of Economics from University of São Paulo (FEA-USP)

Abstract: This paper examines how religious subsidies contributed to the rise of Evangelicals and the decline of the Catholic church, a commonly observed trend in the Christian world. Using the Brazilian experience as a showcase, we build and estimate a dynamic game of church entry using temple entry/exit data across municipalities for 1991-2018. Our counterfactual analysis shows that Evangelicals gain market share from Catholics as tax exemptions increase entry of smaller churches. By combining DiD estimates and our counterfactual scenario, we show that the vote share of the Congressional Evangelical caucus would have been 20% lower if state subsidies had been removed.

Keywords: Religion; Tax; Dynamic Oligopoly; Dynamic Game Estimation (search for similar items in EconPapers)
JEL-codes: C57 C73 H25 Z12 (search for similar items in EconPapers)
Date: 2022-03-24
New Economics Papers: this item is included in nep-gth
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