The economics of Ramadan: Less work and more pray… …make Muhammad poorer but happier

Economist: The Islamic calendar is lunar, so Ramadan rotates through the seasons. In Egypt, for example, the holy month now falls during the long days of summer. But in 15 years, it will occur in winter, when the days—and, therefore, the fasts—are shorter. The opposite is true for Muslims in southern locales. This cycle, unrelated to other factors that might affect the economy, “presents a kind of naturally occurring experiment”, wrote Filipe R. Campante and David H. Yanagizawa-Drott of Harvard University in the New York Times. “Religious practice is precisely varied and everything else is left in place.”

In a study published last year in the Quarterly Journal of Economics, Messrs Campante and Yanagizawa-Drott looked at data from nearly every country over the past 60 years and found that longer fasting times had a deleterious effect on economic growth in predominantly Muslim countries—not just during Ramadan, but throughout the year. If, say, the average Ramadan fast were to increase from 12 hours to 13 hours, output growth in that country for the year would decline by about 0.7 of a percentage point, they found. “It is a robust negative relationship,” says Mr Yanagizawa-Drott.

Other research suggests that Muslims are less productive during Ramadan. A study by Heather Schofield of the University of Pennsylvania showed that fasting by Indian agriculture workers led to a 20-40% drop in productivity when the holy month fell in the planting or harvesting season. Office workers are said to put off meetings and decisions until after Ramadan, during which trading activity tends to decline on stockmarkets in the Middle East.

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