Abstract: This paper reviews theoretical and empirical studies of the economics of religion in Western countries using a “supplydemand” framework. It is found that the existing theories in the economics of religion try to explain the mechanism of religious choice from either the supply or demand angle. The religious market theory, based on the supply dimension, takes the religious market structure as the determinant of religious choice, whereas the religious social capital theory, religious household production model, religious human capital model, and expost social insurance model, all based on the demand dimension, underline the impact of the interpersonal attachment within social networks, opportunity cost of religion participation, efficiency of religious production, and public goods supply of religious organization on religious choice, respectively. The robust factors affecting the religious choice identified in the existing empirical studies include age, gender and family. Although economics of religion in the West has developed a lot in recent years, this discipline is still a new one and there are obvious limitations in it. Firstly, current theories usually emphasize only one of the mechanisms of the religious choice based on either supply or demand, rarely integrating the two aspects together. Secondly, none of the theories have enough empirical evidences. Thirdly, most of the current theories in economics of religion were built on traditional Christian religions without much about other major religiousus belief systems. Since the opening and reforming, China has experienced huge and rapid changes in religious faiths. Introducing economics of religion as a perspective to China offers an opportunity to examine the religious beliefs in current China and to build and develop related theories. Meanwhile, scholars should take into consideration the differences between the Chinese society and Western societies as well as the uniqueness of China when they want to do religious studies. They should be careful when applying this perspective.

Key words: rationality, choice of religious beliefs, economics of religion