Cultural economics

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 demonstrate to cause significant differentials in decision-making and the management and valuation of assets. 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 demonstrate to cause significant differentials in decision-making and the management and valuation of assets. Applications include the study of religion, 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. These trajectories consist of regularities, which have been built up throughout the years and guide individuals in their decision-making process. Economists have also started to look at cultural economics with a systems thinking approach. In this approach, the economy and culture are each viewed as a single system where 'interaction and feedback effects were acknowledged, and where in particular the dynamic were made explicit'. In this sense, the interdependencies of culture and the economy can be combined and better understood by following this approach. Said E. Dawlabani's book MEMEnomics: The Next-Generation Economic System combines the ideas of value systems (see value (ethics)) and systems thinking to provide one of the first frameworks that explores the effect of economic policies on culture. The book explores the intersections of multiple disciplines such as cultural development, organizational behavior, and memetics all in an attempt to explore the roots of cultural economics. The advancing pace of new technology is transforming how the public consumes and shares culture. The cultural economic field has seen great growth with the advent of online social networking which has created productivity improvements in how culture is consumed. New technologies have also lead to cultural convergence where all kinds of culture can be accessed on a single device. Throughout their upbringing, younger persons of the current generation are consuming culture faster than their parents ever did, and through new mediums. The smartphone is a blossoming example of this where books, music, talk, artwork and more can all be accessed on a single device in a matter of seconds. This medium and the culture surrounding it is beginning to have an effect on the economy, whether it be increasing communication while lowering costs, lowering the barriers of entry to the technology economy, or making use of excess capacity. This field has also seen growth through the advent of new economic studies that have put on a cultural lens. For example, a recent study on Europeans living with their families into adulthood was conducted by Paola Sapienza, a professor at Northwestern University. The study found that those of Southern European descent tend to live at home with their families longer than those of Northern European descent. Sapienza added cultural critique to her analysis of the research, revealing that it is Southern European culture to stay at home longer and then related this to how those who live at home longer have fewer children and start families later, thus contributing to Europe's falling birthrates. Sapienza's work is an example of how the growth of cultural economics is beginning to spread across the field. An area that cultural economics has a strong presence in is sustainable development. Sustainable development has been defined as '...development that meets the needs of the present without compromising the ability of future generations to meet their own needs...'. Culture plays an important role in this as it can determine how people view preparing for these future generations. Delayed gratification is a cultural economic issue that developed countries are currently dealing with. Economists argue that to ensure that the future is better than today, certain measures must be taken such as collecting taxes or 'going green' to protect the environment. Policies such as these are hard for today's politicians to promote who want to win the vote of today's voters who are concerned with the present and not the future. People want to see the benefits now, not in the future.