Paper #1432

Title:

Agricultural risk and the spread of religious communities

Authors:

Philipp Ager and Antonio Ciccone

Date:

July 2014 (Revised: October 2016)

Abstract:

Building on the idea that members of religious communities insure each other against some idiosyncratic risks, we argue that religious communities should be more widespread where populations face greater common risk. Our argument builds on idiosyncratic and common risks aggravating each other. This implies that individuals have a greater incentive to mutually insure against idiosyncratic risk when greater common risk makes the worst case scenario of bad realizations of common and idiosyncratic risks more likely. Our empirical analysis exploits rainfall risk as a source of common agricultural risk in the nineteenth-century United States. We show that a greater share of the population was organized in religious communities in counties with greater rainfall risk. The link between rainfall risk and membership in religious communities is stronger among more agricultural counties and counties exposed to greater rainfall risk during the growing season. We also find that among the historically more agricultural counties, more than 1/3 of nineteenth-century differences in religious membership associated with rainfall risk persist to the turn of the twenty-first century.

Keywords:

Religious community membership, agricultural risk, informal insurance.

JEL codes:

Z12, O13, N31.

Area of Research:

Macroeconomics and International Economics

Download the paper in PDF format