Wednesday, July 20, 2011

The Price of Religion

Ever wondered what religion is worth? Is it worth more than sex for example?

An interesting statistic on Google is the ratio of hits on sex versus God. It is 1.457. In the US the porn industry grosses about $14.36 billion per annum, which is a bit more than 1/6th of the money going to religion in the US (as you will see below). On the other hand the porn industry worldwide is larger than the revenues of the top technology companies Microsoft, Google, Amazon, eBay, Yahoo!, Apple, Netflix and Earthlink combined so sex seems worth quite a bit. People seem to need it.

Needs however are contingent. At base you need just enough food and water to survive and breeding (and even shelter) is a luxury. But if you regard breeding or sex as a necessity you will require much more of it. The interesting thing is that for sexual purposes it becomes important to have more than the other guy and no matter how rich everyone gets that will remain an important factor. A need then is something that is contingent on conditions and needs evolve as conditions change. Then there are needs that some people have that others don't. Responding to things depends partially on conditioning history and that is fairly individual. Even genes governing needs are not universal e.g. where you stand on the need for order versus flexibility in your environment, is highly heritable. So what is a real need for me may be no more than a wasteful whim to you.

Money spent on anything always involves an opportunity costs. For those who spend money on religion, sex or cigarettes it’s definitely worth it. For some people religion is a terrible waste of money whereas the amount spent on sex is insufficient. For an old man who has no testosterone left too much is spent on sex. Even if you do think your need or want is worth the cost it always involves a loss of the ability to satisfy other needs/wants. Naturally believers prefer to focus on the benefits of religion but atheists would be unable to appreciate the value of religion and would chose to focus more on the lost opportunities. We make decisions about what opportunities to actualize or let go so and if what I want to actualize you want to let go then we can help each other by trading. Once trading happens the market picks up on the relative volumes of supply and demand and assigns an optimum price. Money then becomes a universal measuring stick of the value of anything that can be traded. The oldest profession tells us sex can be traded for money.

Religion grosses $84.22 billion or 0.615% of GDP per year.

What about religion? In 2005 in the USA $42.11 billion (in 2010 dollars) was contributed toward religion (directly to churches). Churches use double their direct contributions - the rest coming from investments, rent, businesses, etc - so the true amount grossed by religion is about $84.22 billion. That's 0.615% of GDP. (₤1.78 billion in donations and ₤3.34 billion overall- or 0.3% of GDP - in the UK).

Religion provides $6.51 billion to charity per year.

For that money one could (at $102105 per new job) create 824868 new jobs and start roughly 75600 new small businesses per year. However since the church employs 2.6 million people one could say that religion creates a net 1.775 million jobs. It also provides on the order of $6.51 billion in charity. So as an investment religion seems to be worth it.

Religion accounts for 3.543 billion man-hours per year and an opportunity cost of $205.436 billion per year. The overall value of religion (adding money and time) is $289.656 per year

From the point of view of time things look a bit different. All churches together have 45 million confirmed registered and 100.84 million more unregistered members. The average number of actual church attendances per year is 16.2 (42% claim to go every week but checks find that only 26% do.) So at 1.5hrs per week spent in church - roughly 3.542 billion man-hours per year were taken up by religious activities. In that time 2.04 million Americans could have been busy in full time productive employment producing $58 in value per man-hour. That adds up to an opportunity cost of $205.436 billion in productive activity. If instead of going to church they spent the same time at their jobs they could have paid for the entire church enterprise - employees, buildings, charity – with a mere 20.5% tax on that extra activity. Alternatively they could have worked for an extra 2 days per year and donated the entire amount to the church.

The US could quadruple their science plus triple their reading with what they devote to religion.

So what could the US have bought with $289.656 billion? The obvious alternative to reliance on religion is reliance on rational enquiry. The US spends $23.24 billion on non-religious books per year and its entire annual scientific research budget is about $54.8 billion so they could quadruple the science while triple the reading

God is worth a Toyota Corolla to the typical believer but God said at least a 5 Series BMW would be more appropriate.

The fact that certain sections of society are accepting the opportunity cost means that religion has some positive value to them (like smoking has for smokers) and I think my estimate of its net present value in the current market is accurate. Initially I thought my estimate is merely a minimum (the least they would be willing to pay) but now I also think it is a maximum. They are supposed to pay 10% of their income (God’s asking price according to the bible) but no group even approaches that (the mean is around 2.5-2.7%) and are constantly being begged and manipulated for funds.

I divided the number of church attendances per year (16.2) by the number of weeks per year (52) and multiplied that by the number of all members (145838334) to get an estimate of the number of full time donors. I divided the result into the $42.11 billion donated to get a figure of $926.8 contributed per regular church member per annum. At a life expectancy of 78 years this means the expected lifetime contribution as an adult between 18 and 78 is God is worth $55608 to someone religious enough to attend church regularly. (I get similar values – in dollars - for the UK and South African churches). But since 1/4 of the people make 3/4 of the donations for the 3/4 least generous or wealthy of the religious their religion is currently worth $18536 - or roughly a new Toyota Corolla. For the 1/4 most zealous (and wealthy) religious the value of their religion would be $166824. That's somewhere between a Porsche 911 and a Ferrari F430. The 10% tithing requirement suggest that the poorest 3/4 are supposed to value religion at least as much as a 5 series BMW per person or a whole house for a family of 3.

The church of God is perhaps worth as much as $17.38 trillion to the current cohort of all believers over their lifetime.

The absolute value of religion is still increasing but the relative value is declining.

Is the value of religion falling or rising? Well for the US the total and per capita (of believers only) contribution is increasing in real absolute terms, and total church membership is up, so demand relative to supply must be increasing. The car equivalent is more than triple today what it was in 1968. On the other hand that has more to do with the falling relative value of cars than an increase in the value placed on religion. The religious are tending to give a smaller proportion of their income than they used to - its dropped from 3.1% in 1968 to 2.5% in 1998 (and up to 2.7% in 2005 in wake of 9-11 inspired revivals), and a steadily smaller proportion of the population are religious enough to practice and pay for it. Apparently Catholics allocate about only 1/3-1/2 as much of their income to religion as Protestants. What's happening is that believers are willing to exchange more products for their religion than they used to but it’s nevertheless a smaller sacrifice. That arguably implies that religion is worth less today than it was a generation ago. Nonetheless at $289.656 billion a year over 60 years of adult life the value of religion to the current cohort of believers is around $17.38 trillion. That’s serious money.

In the UK (and elsewhere in Europe outside of ex-communist countries) even the absolute contributions and church attendances have fallen dramatically. In ex-Communist states religion is on the rise but is still lower than the rest of Europe. This rise will probably reverse sometime.

In the Muslim world people are becoming more fanatical (and no doubt increasing financial contributions) but one needs to be careful here because religion is a vehicle for political expression in Muslim states (rather than solely a devotion to God) and there is a decline of interest among the youth throughout the Muslim world - even in Iran and Saudi Arabia. Even here the value of religion is declining. It would be interesting to put a cash value to the various religions for the faithful and compare them all.

So there you have it – the typical believer gives up a Toyota Corolla, and a family of 3 gives up a house, to practice their faith. Is that more or less than the ancient Hebrew sacrificed in livestock at the altar over his lifetime? Unfortunately I don’t really know but it can’t be far off. Collectively the US faithful give half as much to charity as the US devotes to porn. That should give you some idea of the values of religion today.

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