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

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  • Raphael Corbi
  • Fabio Miessi Sanches

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.

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  • Raphael Corbi & Fabio Miessi Sanches, 2022. "Church Competition, Religious Subsidies and the Rise of Evangelicalism: a Dynamic Structural Analysis," Working Papers, Department of Economics 2022_09, University of São Paulo (FEA-USP).
    • Handle: RePEc:spa:wpaper:2022wpecon09
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    More about this item

    Keywords

    Religion; Tax; Dynamic Oligopoly; Dynamic Game Estimation;
    All these keywords.

    JEL classification:

    • Z12 - Other Special Topics - - Cultural Economics - - - Religion
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • C57 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Econometrics of Games and Auctions
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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