Religious festivals in Mexico may have an unexpected economic impact

December 6, 2022

Contact: Jon Meerdink (meerdink@umich.edu)

Ann Arbor — Religious communities in Mexico spend surprisingly large shares of their resources on religious festivals—and the timing of those festivals may be hurting the economies of the communities in which they take place.

That’s the conclusion of a new paper published by Dean Yang, professor at the University of Michigan’s Department of Economics and Ford School of Public Policy, and research professor in ISR’s Population Studies Center. Yang, with co-author Eduardo Montero, studied  the long-run economic impact of Catholic patron saint day festivals in Mexico. 

Mexico was an ideal location for study. Nearly all towns annually celebrate a specific Catholic saint or holy figure. Saint day celebration dates are scattered across the calendar year, according to the Catholic liturgical calendar set by the Vatican. These festivals, Yang says, can be very expensive.

“They tend to be very costly celebrations in terms of both the time and financial resources devoted by the population,” he said. “There’s typically one central day, and there are typically three to seven other days of festival activities around that day. Our key insight is that there could be negative consequences if your festival happens to take place in the key planting or key harvest times for your locality, and that’s because festivals compete with agricultural production for time and financial resources.”

Local populations, the paper finds, can devote their time efficiently to either harvesting and planting crops or celebrating the festival, but not both. Yang and Montero hypothesized that localities whose festivals coincide with either the planting or harvesting period would show negative long-term consequences in terms of economic development. 

“You would expect having to spend time and money on festivals could come at the cost of agricultural production,” Yang said. “And that’s exactly what we find. Places that have what we call agriculturally-coinciding festivals — festivals that happen during the key planting or the harvest months — end up having lower agricultural productivity. And over the long run, they experience less structural transformation toward the modern sector of the economy.”

The paper’s main data sample included about 1,600 municipalities. The researchers drew much information about those municipalities from the online Encyclopedia of Municipalities in Mexico, and research assistants collected the data for the remaining cities and towns. That data was cross-referenced with information from the Catholic church, which provided key information about the timing of specific festivals.

The paper also makes some policy recommendations concerning how communities can offset the financial impact of their festivals, such as community-oriented savings programs that can help residents better prepare for the financial burden associated with festival spending. 

“Basically, we’re looking for things that can offset the crowd-out of investment activities that happen to coincide with the festival.”

However, Yang says a crucial takeaway from the research is not that religious festivals need to be changed — or even that deriving an economically optimal calendar is the end goal.

“We don’t think people should necessarily change their religious practices, for the record. Economic optimization is not necessarily the thing here,” Yang said. “Festivals are associated with higher social capital, and we think that people have important aspects to their lives that are not economic.”

Yang’s paper focuses specifically on Catholic festivals in Mexico, but there are many other parts of the world where festival celebrations are important. He believes that further studies would likely find a similar relationship between festivals and economic outcomes.

“We hope that other scholars will take our methods and apply them to other societies, and not only Christian ones, to see if the effects of festivals are similar in other contexts,” Yang said. “People who have read the paper have suggested we look at Catholic saint day festivals in Peru, Colombia or the Philippines, or at Hindu festivals in India. We think studies in these other contexts could very well find similar results.”

Religious Festivals and Economic Development: Evidence from the Timing of Mexican Saint Day Festivals was published by the American Economic Review in October. The full text is available online. Listen to the interview with Montero and Yang on the American Economic Association Research Highlights podcast.