One of the most ironic things about religious societies is how everyone tries to spend substantial resources to celebrate religious festivals. Particularly for low income families, they would even go as far as borrow money and essentially decrease future flows of disposable income. Maybe they derive some non-economic benefits from it much similar to how people in the other side of the spectrum (a.k.a. rich people) get into philanthropy.
These thoughts are exactly what I found in the latest NBER paper by Eduardo Montero and Dean Yang. Entitled "Religious Festivals and Economic Development: Evidence from Catholic Saint Day Festivals in Mexico", Montero and Yang showed that in Mexico, agriculturally-coinciding festivals have negative effects on household income and other development outcomes. They also lead to lower agricultural productivity and higher share of the labor force in agriculture, consistent with agriculturally-coinciding festivals inhibiting the structural transformation of the economy. So why do these families persist on spending beyond their means? They showed that agriculturally-coinciding festivals also lead to higher religiosity and social capital, potentially explaining why such festivals persist in spite of their negative growth consequences.
I guess this is one of those cases where non-economic benefits outweigh the economic ones. These humans are still rational beings.
