Towards divine economics: Some testable propositions

Abstract

Despite the use of the robust econometric models like AIDS, Translog, Rotardam, the results of studies on consumer behaviour are surprisingly away from the real world situation because of the important heterogeneous variables which have received little attention as yet from economists. Such variables may be found in attitudes and values acquired by consumers in a variety of social and religious environments. In this paper, some insights gained from the Holy Qur'an the Hadith, and other sources of Islamic-knowledge have been summed up in the form of empirically testable propositions. We do not intend to test them here but simply aim at highlighting how the behaviour of a 'real man' could differ from that of the 'economic man'. The paper provides some guidelines for research on religiosity and economic behaviour especially relating to time allocation. The paper suggests a multi-stage budgeting approach for econometric modelling. Based on the suggested approach, future research may determine the type and magnitude of effects of religiosity on, for example, time allocation to religious activities, charity, home production, leisure and voluntary work, earnings, occupational choices, and educational preferences, etc., among individuals of different religions and sects having varying levels of religiosity.