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Concept
Cultural economics
Summary
NOTOC
Cultural economics is the branch of economics that studies the relation of culture to economic outcomes. Here, 'culture' is defined by shared beliefs and preferences of respective groups. Programmatic issues include whether and how much culture matters as to economic outcomes and what its relation is to institutions. As a growing field in behavioral economics, the role of culture in economic behavior is increasingly being demonstrated to cause significant differentials in decision-making and the management and valuation of assets.
Applications include the study of religion, social capital, social norms, social identity, fertility, beliefs in redistributive justice, ideology, hatred, terrorism, trust, family ties, long-term orientation, and the culture of economics. A general analytical theme is how ideas and behaviors are spread among individuals through the formation of social capital, social networks and processes such as social learning, as in the theory of social evolution and information cascades. Methods include case studies and theoretical and empirical modeling of cultural transmission within and across social groups. In 2013, Said E. Dawlabani added the value systems approach to the cultural emergence aspect of macroeconomics.
Cultural economics develops from how wants and tastes are formed in society. This is partly due to nurture aspects, or what type of environment one is raised in, as it is the internalization of one's upbringing that shapes their future wants and tastes. Acquired tastes can be thought of as an example of this, as they demonstrate how preferences can be shaped socially.
A key thought area that separates the development of cultural economics from traditional economics is a difference in how individuals arrive at their decisions. While a traditional economist will view decision making as having both implicit and explicit consequences, a cultural economist would argue that an individual will not only arrive at their decision based on these implicit and explicit decisions but based on trajectories.
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