Sacrifice and Stigma: Managing Religious Risk

This article develops a theoretical explanation for the incidence of sacrifice and stigma or “strictness” that—unlike the extant literature—explicitly incorporates a supernatural motive for religiosity. This innovation permits a precise delineation of religious risks and leads to the critical insight that “strictness” is an instrument of mutually beneficial risk mitigation. The theory yields alternative explanations for all empirical regularities on the incidence of strictness that the club model explains, including the seemingly anomalous labor market behavior of Ultra‐Orthodox Jews in Israel, the high lethality of extremist religious sects, and the positive correlation between strictness and social service provision. Among the attributes that distinguish the risk mitigation approach from the club model are: its explanation of observed income dispersion within strictness categories that is substantially greater than that implied by the club model; its prediction that the positive correlation between strictness and exclusivity is a causal relationship in which exclusivity is causally prior to strictness; and its demonstration that variation in the risk mitigation benefits members derive from strictness is at least as important as variation in the opportunity costs of strictness in explaining variation in the levels of strictness employed across denominations and sects.