Why fasting increases happiness even if economic growth stalls

In Muslim countries, Ramadan ushers in changes to the daily work schedule. Economists have found an interesting contrast. While there is a negative impact on economic growth, happiness levels tend to increase. Which is to say, the same Muslims who are producing less also report higher levels of subjective happiness. These dynamics should serve to remind Muslims about the true goals of Ramadan.

Estimating the effect of Ramadan on economic growth is not as easy as it might appear. The logical starting point would be to compare the economic growth of Muslim majority countries to those where Muslims are a small minority during the month of Ramadan.

The problem with this approach is that Muslim and non-Muslim countries differ in many ways that are unrelated to fasting. Accordingly, we cannot be sure that the observed difference in economic growth is the result of fasting; it might be any one of the other ways in which the two sets of countries differ.

For example, during Ramadan in 2020, oil prices fell due to a Covid-19-induced collapse in the global demand. In terms of population, Muslim countries are overrepresented among major oil producers. So, an economist comparing economic growth in Muslim countries to that in non-Muslim ones during Ramadan 2020 would erroneously conclude that fasting has a large negative impact on economic growth. This well-known difficulty in statistics is known as the “omitted variable problem” or the “confounding variable problem”.

In a 2015 paper, the solution proposed by Harvard University professors Dr Filipe Campante and Dr David Yanagizawa-Drott was to exploit the variation in the hours of fasting caused by the Earth’s position in its orbit of the Sun, and by a country’s distance from the equator.

As any Muslim who has fasted for several years knows, the incongruence between lunar and solar months means that Ramadan shifts back approximately 10 days annually. In a given country, the number of hours of sunlight – and hence the number of hours Muslims are required to fast – depends on two factors: the country’s distance from the equator, and the calendar month (which points to the Earth’s position in its orbit of the Sun).

This means longer fasting when Ramadan coincides with summer, and shorter when it coincides with winter, with the difference becoming more acute the further the country is from the equator.

The technique used by Dr Campante and Dr Yanagizawa-Drott is to essentially compare Muslim countries to themselves and one another, noting that the ones that are further from the equator have to fast longer hours than the ones close to the equator, and that the magnitude of the difference changes as Ramadan shifts through the solar calendar. This allowed them to isolate the impact of fasting, filtering out the noise coming from other economic variables that might change at the same time.

The study finds clear evidence of a negative impact of fasting on economic growth in Muslim countries. This is expected, since the month sees a shortening of the working day. Moreover, Muslims spend a smaller proportion of their time on activities that increase GDP, such as shopping and going to the movie theatre, and a greater proportion on activities that do not increase GDP, such as praying and reading the Quran. This change in behaviour is precisely what Islam prescribes.

The technique Dr Campante and Dr Yanagizawa-Drott use to estimate the effect of Ramadan on economic growth can also be used to estimate its effect on other variables. They use the World Values Survey – one of the most important surveys of people’s socio-demographic characteristics and views – to determine how fasting affects people’s subjective well-being, that is, their self-reported level of happiness.

The authors find that Muslims are significantly happier during Ramadan. Again, this is entirely expected since – despite the physical hardship associated with fasting – it

Whatever Muslims lose in terms of consumption is more than offset by higher levels of life satisfaction

is something that Muslims willingly do out of a sense of devotion. Moreover, Muslims also spend more time with loved ones, taking a break from hectic, work-centric lifestyles. In other words, the decrease in economic growth is entirely worth it – whatever Muslims lose in terms of consumption of goods and services is more than offset by their higher levels of life satisfaction during Ramadan.

The brain is miraculous, but it has many flaws, and one of them is that it can be difficult to break a bad habit, such as forgetting to visit loved ones or eating an unbalanced diet. In this regard, Ramadan works as an externally enforced self-audit. It helps Muslims reassess how they allocate their time.

Yet, arguably, the most important reason why Muslims should fast appears in the Quran’s first reference to the act: “O believers! Fasting is prescribed for you – as it was for those before you – so perhaps you will become mindful of Allah.” (2:183).

Accordingly, Muslims should not worry about the adverse effect of Ramadan on GDP growth – they should embrace it.