The Impact of the Religious Prejudice of Muslim People on Their Financial Investments Oğuz Kaan Yavuz 21212015 Today ı will talk about my research about the impact of the religious prejudice of muslim people on their financial investments. I had some observations in real life about this topic and ı tested whether my thesis was true or not. The reason ı chose this topic was really interesting ı think. Once ı learnt the usage of the repo rate and ı learnt from my father that the rent price of our house was 650 tl. ı calculated our return if we invested our money to the repo rate and ı found out that we could earn 900 tl. ı told him this and he replied that he has nothing to do with earning interest because he was thinking that it is forbidden by islam. And thats why ı chose this topic to find out whether it is a general perception or not.

Aim Objective of my research is to understand the general impact of the religious bias which is about interest earned & expenditure which is forbidden by Islam on the investment purposes of Muslim people in Turkey.

Literature Alper Ates made a survey for his thesis, which is about the effect of religious biases on muslim people’s investment decision. It was concluded : %45 It does not effect my decision %55 it effects my decision But there is so important point. This survey has not got a part measuring the PARTICIPANTs religious sensitiveness or directly question as do you invest the interest (with zero risk). This survey has only one question about effects of religious biases on investment decision and this results i think is not efficient.

About Survey My survey had 12 question, and also it was an Online Survey, only thing i needed to do was to prepare the survey and share it on social web sites. My sample consists 79 people but 11 of them were eleminated because of several reasons (for example 2-3 person completed more than one survey etc.)

Difficulties The most compelling thing to me during my research was preparing the survey questions. Because questions must be simple to understand and they must help my research simultaneously. It was really so hard

Survey Results And finally

İn addition, mean of income level of my sample is 2697,872 TL İn addition, mean of income level of my sample is 2697,872 TL. And also this income level is higher than minumum wage level of turkey.

Econometric Analysis I used Logistic Model for testing and modelling my survey answers. Mainly my dependent variables are Interest Earning and Interest Expenditure. If people earn interest or thinking to earn interest, they get ‘1’ but the dependent variable will get ‘0’ in the opposite case. If people expenditure with interest get ‘1’, but the dependent variable will also get ‘0’ in the opposite case. In addition i used gretl econometric program during the analysis.

The Measurement of Dependent Variables: Interest Expenditure : If at least one of the questions about loan from a bank are answered with ‘yes’, Interest Expenditure get ‘1’. If All of this questions answered ‘No’, then dependent variable of Interest Expenditure will get ‘0’.

Interest Earning: If at least one of the questions about earning interest with several insturements are answered with ‘yes’, then Interest earning will get ‘1’, but if all of the questions are answered with ‘no’ then interest earning get ‘0’.

The Measurement of Independent Variables Education: get ‘1’ if people has higher than high school diploma, if not get ‘0’. All ‘Yes’, ‘No’ questions and Religious Questions 1 and 3 : Yes = 1, No = 0. Religious Sensitiveness question (Religious Question 2) : Sensitiveness = 1, Opposite = 0 Gender: 1 = Women, 0 = Men

Analysis Results Interest Expenditure: Coefficient Std. Error z p-value const 0.722921 1.43449 0.5040 0.6143 religious_Q1 0.667985 0.9116 0.7328 0.4637 religious_Q2 0.678045 1.07316 0.6318 0.5275 religious_Q3 −0.209024 1.15076 −0.1816 0.8559 Education −0.85222 1.24696 −0.6834 0.4943 Income 0.000439086 0.000335905 1.3072 0.1912 Gender 0.58108 0.919002 0.6323 0.5272 There is no significancy any independent variable and also there is no power of expalanatory variable to explain the Independent variable. İts means that there is no correlation between Religious Biases and Interest Expenditure. And also I expect this because of my observation in my life. There is good news for Girls, also there is no correlation between using credit card and being a women According to my reasearch because gender part is also insignificant.

2. Interest Earning: Missing or incomplete observations dropped: 16 Dependent variable: Intrest_earn Standard errors based on Hessian Coefficient Std. Error z p-value   const 0.781104 1.28918 0.6059 0.5446 religious_Q1 −1.53624 0.850422 −1.8065 0.0708 * religious_Q2 −2.62468 1.26538 −2.0742 0.0381 ** religious_Q3 −0.959637 0.894499 −1.0728 0.2834 Education 0.0803834 0.897416 0.0896 0.9286 Income 0.00023865 0.000223434 1.0681 0.2855 Sex 0.150438 0.840537 0.1790 0.8580 In interest earning I have 3 different model because of doesn’t answered question about education. So first model actually now we are seeing has not 16 variables. Even so there is two significance independent variable which are reading holly book in mother tongue and sensitiveness of religious restrictions. There is negatively relationship between these independet variables and interest earning. İts mean that For example I am a muslim people and I read Quran in turkish I don’t invest my money to interest or I said that I'm being very careful about religious prohibitions and you can say he do not invest his money or savings in interest.

Regulation with all 16 peoples have univercity diploma: Bağımlı değişken: Intrest_earn Hesseyen'e dayalı ölçünlü hatalar Katsayı Ölç. Hata z p-değeri   const 0,938683 1,27674 0,7352 0,4622 Gender 0,00606907 0,778002 0,0078 0,9938 Education 0,503672 0,877551 0,5740 0,5660 Income 0,000374089 0,000213048 1,7559 0,0791 * religious_Q1 −2,03194 0,807528 −2,5163 0,0119 ** religious_Q2 −3,13232 1,24461 −2,5167 0,0118 religious_Q3 −1,29543 0,820519 −1,5788 0,1144 Now I consider peoples more educated, its means that I varsayıyorum ki 16 people has higher than univercity diploma we have 3 significance variable again religious 1 and 2 Questions significant but in addition to them Income will significance. But there is more interesting situation than that which is signifance level of religious 1 and religious 2 question increase. Its mean that If increase the education, muslim people (who has religious biases) their income level is not so high we understand that because of the correlation between income and dependent variable is positive so if someone earn money more they can invest their money to the interest.

Regulation with all 16 peoples have not univercity diploma: Bağımlı değişken: Intrest_earn Hesseyen'e dayalı ölçünlü hatalar Katsayı Ölç. Hata z p-değeri const 1,70154 1,15658 1,4712 0,1412 Sex −0,12349 0,78729 −0,1569 0,8754 Education −0,357945 0,743512 −0,4814 0,6302 Income 0,000319742 0,000208357 1,5346 0,1249 religious_Q1 −1,97705 0,808817 −2,4444 0,0145 ** religious_Q2 −3,34894 1,2566 −2,6651 0,0077 *** religious_Q3 −1,23637 0,815015 −1,5170 0,1293 There is really interesting situation again. The significance level of Religious Question 1 (reading Quran in turkish) < the previous data (when education level high) but also The significance level of Religious Question 2 (sensetiveness) > the previous data (when education level high) its mean that if there is low education level of muslim people, there will be the religious sensetiveness of restirictions play main role (religious biases about earning interest), but if education level will high, there is both of reading Quran and sensetiveness of restirictions of their religion’s playing main role (religious biases about earning interest).

Conclusion To sum up, there is no correlation between interest expenditure and religious biases. However, there is a correlation between interest earning and religious biases. I was expecting this results as a result of my observations in real life and my thesis about this topic did really came true.