Factors of religiosity and loss aversion

Loss aversion manifests as a decision bias in which avoiding losses is preferred over acquiring rewards and can drastically alter an individual’s decision-making by overweighting potential losses relative to gains of equal magnitude. Consequently, individuals may require greater positive compensation to offset potential losses, exhibit contradictory choice preferences, or even avoid the decision entirely; and this behavior may be ascribed to an over-reliance on automatic, unconscious (intuitive) judgments rather than initiating analytic reasoning more capable of objectively evaluating outcomes.

Religion (specifically Christianity) is the topic of focus, as preliminary evidence suggests an individual’s intuitive inclinations positively correlate with and predict religious beliefs. Moreover, self-reported religious beliefs significantly differed as a function of inducing either intuitive or reflective mindsets. Therefore, the purpose of this experiment was to test the hypothesis that religious participants will display significantly greater levels of loss aversion than nonreligious participants.

This hypothesis extends from a previous study relating large-scale cultural and religious differences with loss aversion. While their results revealed religious orthodoxy strongly influenced loss aversion, the parameters elicited may be less stable as only two lottery questions were asked and religion was determined by cultural demographics. This study used the same design, but with a total of ten lotteries and a more detailed investigation into individual religious factors.

While loss aversion coefficients replicated the overall behavioral effect (Median θ = 2.6), independent sample, Mann-Whitney U tests did not yield any significant differences between Christian and Nonreligious participants (p > 0.05); nor did any of the religious factors examined account for a significant amount of variability.

This study attempted to add to current knowledge by further conflating the relationship between religiosity and adaptive decision strategies susceptible to errant and inconsistent behavior. While the hypotheses were unsupported, a null finding is still important, and future research re-testing this association or introducing causational designs may prove more fruitful in understanding these complex relationships.