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The authors use religion as a proxy for gambling and investigate whether geographical variation in religion-induced gambling norms affects aggregate market outcomes. Motivated by the evidence from gambling studies, they conjecture that gambling propensity would be higher in regions with higher concentration of Catholics relative to Protestants. They consider four economic settings in which the existing literature has suggested a role for gambling and speculation. First, they show that gambling preferences influence the portfolio choices of institutional investors. Investors located in regions with a higher Catholic-Protestant RATIO (CPRATIO) exhibit a greater propensity to hold stocks with lottery features.
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