Do physiological and spiritual factors affect economic decisions?

Cem Demiroglu, Oguzhan Ozbas, Rui C. Silva, Mehmet Fatih Ulu

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)


We examine the effects of physiology and spiritual sentiment on economic decision-making in the context of Ramadan, an entire lunar month of daily fasting and increased spiritual reflection in the Muslim faith. Using an administrative data set of bank loans originated in Turkey during 2003 to 2013, we find that small business loans originated during Ramadan are 15% more likely to default within two years of origination. Loans originated in hot Ramadans, when adverse physiological effects of fasting are greatest, and those approved by the busiest bank branches perform worse. Despite their worse performance, Ramadan loans have lower credit spreads.

Original languageEnglish
Pages (from-to)2481-2523
JournalThe Journal of Finance
Issue number5
Publication statusPublished - Oct 2021


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