The Agency Relationship in Churches: An Empirical Analysis

Abstract . The agency relationship has been observed in a variety of settings. Churches, like other organizations, are plagued with the typical agency problems of moral hazard, observability, goal displacement, and risk aversion. How do churches cope with these issues in dealing with their most critical resource, clergy? This study analyzes the agency relationship between churches and their clergy. Using data from nine denominations, this study finds strong evidence that pastor compensation is not tied directly to performance, but rather indirectly through promotion tournaments. Successful pastors are rewarded by being called to larger, presumably wealthier and more prestigious, congregations. Since it is so difficult to observe and measure a pastor's performance in specific activities, churches differentiate good pastors from mediocre ones by considering their total performance, rather than any specific activities.     

An alternative to economic retrenchment

The remoteness and geography of Alaska create service access rigidities that are difficult to overcome. The delivery of basic services like healthcare, police protection, and justice are often inadequate in rural places. The continued employment of neoclassical assumptions in policy making is a primary reason policies fail to overcome the barriers. A broader scope of analysis can inform the issues faced by rural residents and provide insight into alternate solutions.     

Citizen Willingness to Assist as Volunteers in the Provision of Local Public Goods: A Case Study of Volunteer Firemen in 70 West German Cities

A bstract . Volunteer activity , from one perspective, that of the theory of public choice , provides an outlet for the articulation of demand for public goods. To analyze its role in that function, a theoretical model is constructed which incorporates the social, benevolence and demand articulation elements of volunteerism into a single utility function. The utility function is based on the economics of clubs and the economics of charity views of utility. The theoretical model shows how the rational individual weighs the benefits and costs of volunteerism and relates this behavior to the rational voter model of demand articulation. The model is then empirically tested, using data for volunteer fire companies in 70 West German cities. The empirical results show that to the extent volunteer activities are considered to be a form of demand articulation, they are consistent with the rational voter hypothesis.     

A Household Production Analysis Of Religious

A bstract Two conventional wisdoms are prevalent among churchgoers with regards to monetary contributions. One is that contributions of their time and money to their church are complementary. The other is that churches are in competition with other charitable organizations for church members'contributions. This study employs the household production model to test these conventional wisdoms. The first is supported (church members who contribute more money also contribute more time) while the second is rejected (churchgoers who contribute more to their church are also more generous to other charitable organizations). Policy implications include advising churches that wish to increase members'financial contributions to focus on increasing member involvement, and to jointly sponsor activities with nonreligious charitable organizations.     

An Examination into the Relevance of the Median Voter Model: Empirical Evidence Offers Support for the Model and Certain Uses

Abstract . This study analyzes some criticisms of the empirical use of the median voter model. In an attempt to evaluate these criticisms, a local school expenditure model is constructed which incorporates various income measures and various measures of tax price. Results indicate that median income outperforms other income measures. This empirical evidence offers support for the median voter model and its use in empirical work. The median tax price measure proved not to be of statistical significance. It should not be used without independent validation. Moreover, it does not outperform other tax price measures, in this test, at least. Further research is needed to explain this seeming anomaly.     

The Optimal Size of a Religious Congregation: An Economic Theory of Clubs Analysis

The economic theory of clubs model is applied to determine the optimal size of a religious congregation. The optimal size is specified to be where total contributions are maximized. This occurs where the marginal benefits of adding a new member (in terms of contributions gained from that new member) equal the marginal costs of that new member (in terms of contributions lost from existing members). Benefits from adding members include enhanced fellowship opportunities and the spreading of fixed costs across a broader base. Costs include the congestion of facilities and a greater tendency to free ride. The model is empirically tested for four denominations. The average Catholic parish is found to be much larger than its optimal size, while the average Episcopalian, Lutheran, and Methodist congregations are all found to be smaller than their optimal size.     

An agency analysis of church–pastor relations

Incentives are critical to the study of economics. But do they work in non‐traditional economic settings, such as religious organizations, in a manner consistent with economic theory? This study considers the agency relationship between churches and their clergy. This paper contends that pastor compensation is not typically tied directly to performance, but rather indirectly through promotion tournaments. Pastors whose performance is recognized as being exceptional are rewarded by being called to larger, more prestigious congregations. Given the difficulty of observing and measuring pastor performance this represents a sensible solution to the church–pastor principal–agent problem. Copyright © 2001 John Wiley & Sons, Ltd.