Abstract
An adequate amount of economic literature exists which examines the determinants of human philanthropic activities however, not much work seems regarding influence of religion in such behaviour. The economists now acknowledge the significance of neglected non-economic factors like religious, spiritual and ethical attributes which play an important role in economic decision making of individuals and households. It is evident from the scriptures describing history that caring of mankind is a divinely prevalent value from the dawn of civilization. The religious orientation promotes and strengthens such values thus causing enhancement in the altruistic activities. Mostly that has been unnoticed and analysis was mainly focused around the warm glow, tax price, public good, social acclaim and impure altruism, missing to also consider Divine beliefs, perceived reward of worldly deeds in an afterlife, in the form of Paradise and Hell. The present study develops a theoretical model under the recently emerged framework known as Divine Economics which models the relationship between perception about an afterlife and household’s systematic behavior to optimize eternal utility (Fala’h) i.e. the successfulness of both lives (here and hereafter) through time and resource allocation in philanthropic activities. Such an allocation is a main tool to alleviate poverty in any religious and particularly Islamic society. The study is based on Religiosity Scales and index of Divine Economics [Hamdani 2004, 2006] have been prepared for the cross sectional analysis of 817 households collected through Divine Economic Survey (2009)3 in four Capital cities in Pakistan and Azad Jammu & Kashmir to examine such hypothesis. This study proves that religiosity has significant consequences on philanthropic activities and leads to a different systematic economic behavior than as assumed in conventional economics. Hence this paper is a contribution towards a better understanding of religiosity, philanthropy and poverty relationship. Moreover, this paper is seminal work of Becker [1974].