An Evangelical Anomaly: Religious Observance and Intertemporal Choice

Educational achievement is positively correlated with religious devotion. However, those religious sects which are more devoted have, on average, lower levels of education. Evangelical Protestants, for example, have the highest level of religious devotion but the lowest level of educational achievement. Previous research explains this by proposing that education enhances the gains to social interaction while substituting for religious belief. We examine an alternative hypothesis, where religion is a moderator of time preference across potential investments, including: savings, social capital, and human capital. We use the COPPS and wealth supplements of the Panel Study of Income Dynamics (PSID) to observe household investments of time and money for various religious groups. Consistent discounting across a range of investments by the religious would indicate that differences in time preferences, rather than idiosyncratic attitudes toward education, account for differential investments across religious groups. Our results suggest that education is the anomaly, and that Evangelical Protestants do not behave differently than other religious groups in areas of altruism or saving. Instead, we find that differences in the level of devotion to religious activities provides the sharpest differences in investment behavior.