Introduction: Household financial behavior in Islamic societies is shaped by Sharia principles such as the prohibition of usury and the encouragement of charitable spending (infaq). Islamic economics, by offering a normative framework beyond purely material considerations, provides a distinct lens for analyzing these behaviors. However, the existing literature suffers from a lack of dynamic mathematical models and empirical data capable of quantitatively capturing these effects.
Objective: This study conducts a dynamic analysis of how adherence to Sharia-based norms influences the consumption, saving, and financial resource allocation patterns of Iranian households. Its main contribution is the development of a dynamic mathematical model that integrates Islamic variables—such as charitable spending Z(t) and avoidance of usurious income R(t)—alongside conventional consumption and saving variables, with adherence to Sharia measured through a formal index α(t).
Methodology: The research adopts a mixed-method approach involving dynamic mathematical modeling, the collection of empirical data from a comprehensive survey administered to 412 households across five major Iranian cities (Tehran, Mashhad, Isfahan, Shiraz, and Tabriz) in 2024, and the estimation and simulation of model parameters using the Nonlinear Least Squares (NLS) method.
Findings: The empirical results show that adherence to Sharia principles significantly alters household patterns of consumption, saving, and financial allocation. A strong positive correlation (0.73) was found between α(t) and charitable spending Z(t), and a strong negative correlation (–0.61) between α(t) and usurious income R(t). Households with high adherence (α(t) > 0.7) allocated more resources to infaq and saving, maintained more balanced consumption, and exhibited substantially lower engagement in usury. In contrast, low-adherence households reported higher consumption levels and greater reliance on interest-based financial tools.
Conclusion: The study concludes that Sharia-based norms exert a measurable and influential role in shaping household financial behavior. These findings carry significant implications for financial policymaking in Islamic economies and underscore the necessity of developing efficient and Sharia-compliant financial instruments that align with household preferences.