Juanjuan Meng is a professor of Department of Applied Economics at Guanghua School of Management, Peking University. Professor Meng's current research interests include Behavior Economics and Behavior Finance. Her research has been published in American Economic Review, Management Science, Journal of Public Economics, International Economic Review, Journal of Development Economics, Games and Economic Behavior, Journal of Economic Behavior and Organization. She currently serves as the associate editor of Management Science. Professor Meng has received financial support from the National Natural Science Foundation of China for Excellent Young Scholar, National Natural Science Foundation of China (General project and youth project) and Beijing Higher Education Young Elite Teacher Project.

This paper analyzes donation behaviors from the perspective of religious beliefs. Utilizing a transaction-level data on income and donation dynamics from a high-income economy in Asia, this paper shows that higher income uncertainty predicts more donations, especially for religious donations, and for negative income uncertainty. This pattern is inconsistent with existing explanations of donation, and we pinpoint evidence that our results are explained by a “wishful thinking” or “spiritual insurance” channel. Indeed we find that donating to religious organizations crowds out demand for market-based insurance products. Our results suggest that the “spiritual insurance” channel of religion can be influential for the donation and insurance markets even outside of underdeveloped markets.