Saturday, November 29, 2008

The salutary effect of blue laws

In this paper we identify a policy-driven change in the opportunity cost of religious participation based on state laws that prohibit retail activity on Sunday, known as “blue laws.” Many states have repealed these laws in recent years, raising the opportunity cost of religious participation... We then use a variety of datasets to show that when a state repeals its blue laws religious attendance falls, and that church donations and spending fall as well... We find that repealing blue laws leads to an increase in drinking and drug use, and that this increase is found only among the initially religious individuals who were affected by the blue laws. The effect is economically significant; for example, the gap in heavy drinking between religious and non religious individuals falls by about half after the laws are repealed.
--Jonathan Gruber and Daniel Hungerman, "The Church vs the Mall: What Happens When Religion Faces Increased Secular Competition?," Quarterly Journal of Economics

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