THE IMPACT OF THE HAJJ ON THE ECONOMY OF SAUDI ARABIA

Abstract

Abstract Church attendance has a negative impact on economic growth whereas, religious beliefs have a positive impact on economic growth (Barro, & McCleary, 2003). This means that religion could be important for the economy. However, in Islamic nations, the Hajj is very important because it is the fifth pillar of their religion (Eid, 2012). Moreover, the Hajj has a positive impact on the attitude of the pilgrims who have performed the Hajj in Mecca (Clingingsmith, Khwaja, & Kremer, 2009). It seems that the Hajj season is not only a matter of devotional and faith-related matters, but it may also a season that could be reviving in all economic sectors, especially in Mecca. Thus, this paper is an empirical study to investigate in the Hajj and its influence on the economy of Saudi Arabia. The Ordinary Least-Squares Regression is used in this paper to estimate this impact. The main variables that will include in the regression are the non-oil GDP of Saudi Arabia and the number of pilgrims who perform the Hajj in Mecca. The result of the OLS regression suggests that there is a positive correlation between the Hajj and the economy of Saudi Arabia but it is an insignificant correlation.