Study of philanthropic behaviour in divine economics framework

Abstract

The present paper is an extension of earlier work in Divine Economics, a framework for the study of religion and economics in each other's perspective [Hamdani (2002); Hamdani and Ahmad (2002a, 2002b); Hamdani (2003a, 2003b)]. The paper discusses the methodology derived from Divine Economics for analysis of philanthropic contributions among the followers of any of the Divine religion i.e. Islam, Judaism and Christianity. Hence the paper contributes towards the long felt need to analyse consumer behaviour in societies having higher degree of religious consciousness that have been ignored by conventional economic models which assume religion as a private matter of individuals and does not, therefore, fall in purview of economics. It is concluded that role of religious beliefs, practices and convictions (religiosity variables) turn out to be as important as certain economic, personal characteristics, household characteristics and demographic variables in determining the resource allocation behaviour of households. Since, it is perhaps, the most difficult to quantify or measure the level of one's faith and practice, the Divine Economics a way for measuring at least relative religiousness of individuals by constructing some 'religiosity scales'. Because in real world, many of the important heterogeneous variables which have yet received little attention from economists, may be found in faith, attitudes and values of individuals, the studies in Divine Economics including the present paper may help bringing the discussion of faith into mainstream of rational choice economics. The faith model highlighted in the present paper also points the economist to explore why despite the use of the robust econometric models like AIDS, Translog, Rotardam, results of studies on consumer behaviour were surprisingly away from the real world situation. The paper also is a step forward move Islamic economics from macro topics like interest-free banking, saving, investment etc. to day-to-day individual's behaviour. Apart from providing analytical procedure for determining philanthropy, the econometric model applied in the present paper is general enough that enables economists to determine the effects of religiosity on many other aspects of individual behaviour such as time-intensive or money-intensive activities of individuals, earning and savings, occupational choice etc. A deeper analysis may also enable economists to study the individuals' economic rationality behind choice of any religious and philanthropic act or even choice of a particular religion or sect.