The Estimation of the Contribution of Difference of Beliefs in Religious Expenditures Gap of Households

One of the most basic properties of the Islamic religion is the payment of religious expenses. The difference in willingness to pay religious expenses is due to differences in the socio-economic characteristics of households, such as income and differences in religious beliefs. Accordingly, the study examines the causes of the religious expenditure gap by using the data from Expenditure-Income household over 2009-2016 and applying Oaxaca-Blinder and Machado-Meta decomposition models. The results of the estimates show that over 89% of the religious expenditure gap is due to differences in beliefs. Also, at the lower quantiles of religious expenditure over 90% of religious expenditure gap is due to differences in beliefs and at the upper quantiles, the share of difference in socio-economic characteristics is about 20%. The evidence of religious expenditure gap between rural-urban household shows that rural households spend more on religious spending because of strong beliefs. In fact, the results show that religious beliefs play a more important role than socio-economic characteristics in determining religious expenditures