The Market for Afterlife Salvation: On Endogenous Establishment and Abolishment of Purgatory in Christianity and Its Effects on the Printing Industry

Zeynab Masoudnia

Advisor: David M Levy, PhD, Department of Economics

Committee Members: Daniel E. Houser, Mark Koyama

June 18, 2014, 11:00 AM to 08:00 AM


According to the doctrine of purgatory, souls departing life in God’s grace who haven’t yet received remission of their sins, will suffer a temporary punishment in purgatory in order to be purged of sins and ready for heaven. Le Goff (1984), a scholar of medieval history, states that the doctrine of purgatory was introduced in Christianity by the Catholic Church in the 12th century. The importance of the doctrine of purgatory is the fact that it connects this world with the next, and those alive can pray and change the faith of souls in purgatory. Thus, purgatory is an interesting topic to study because the religious firm, the Church, can alter the well-being of individuals in both this world and the next. This research studies the history of endogenous changes in afterlife salvation and the doctrine of purgatory, along with the economic incentives leading to these changes.

The first chapter offers a demand side explanation for the establishment of purgatory. Contrary to previous literature ( Ekelund et al.1992) that claims the reason for the birth of purgatory was the Church’s rent-seeking behavior, I distinguish between the establishment of purgatory and sale of indulgences, and argue that purgatory was a comforting doctrine and in popular demand by believers. The sale of indulgences and other theological background required for indulgences, such as treasury of merit and confession, was introduced to Christianity later, and led to the Church’s rent-seeking behavior. Furthermore, the existence of parallel doctrines in other religions such as Islam may have caused religious syncretism between the two religions on the topic.

The second chapter explains the gradual abolishment of purgatory. The abolishment of purgatory is more complex than just competition between the Church and the Protestant Reformation, as argued in previous economics of religion literature. The Reformation movement was initiated with a rejection of the sale of indulgences but it had a more confirming view toward purgatory. I explain that the theological rejection of purgatory happened as a result of exogenous technological shock from the biblical translation revolution. As Martin Luther translated the Bible using the Greek and Hebrew sources for the first time in centuries, he noticed the questionable scriptural sources for the basis of purgatory. The institutional change leading to eventual abolishment of purgatory happened as a result of English Reformation. As England separated from the Church, the state attempted to gain the financial benefits of chantries and monasteries. The confiscation of the Church’s institutions for prayer of souls, such as monasteries and chantries, was only possible if there was no need for such prayer, or in other words, no purgatory.

The third chapter studies the consequences of rejection of indulgences and purgatory on the printing industry. Many economic literatures explain that the printing industry aided the Protestant Reformation; however, they fail to notice the technological changes in printing at the time of the Reformation and the nature of changes in the market for printing. This chapter studies the effects of the Reformation movement on the printing industry and points out that the Reformation’s rejection of the sale of indulgences led to a religious controversy and created a dynamic demand for printing. As the Reformation movement demanded high quantity of printing at rapid speed, it helped the new printing technology of movable types to flourish. In the part of the world without similar religious controversy and consequent high demand for printing, such as Islamic countries at the time, the printing industry was not as successful as in Europe at the time of Protestant Reformation.