What is Cultural Economics ?

Until recently, economists have been reluctant to rely on culture as a possible determinant of economic phenomena. Much of this reluctance stems from the very notion of culture: it is so broad and the channels through which it can enter the economic discourse so ubiquitous (and vague) that it is difficult to design testable, refutable hypotheses. In recent years, however, better techniques and more data have made it possible to identify systematic differences in people’s preferences and beliefs and to relate them to various measures of cultural legacy. These developments suggest an approach to introducing culturally-based explanations into economics that can be tested and may substantially enrich our understanding of economic phenomena.

Culture is an umbrella term which encompasses the social behavior and norms found in human societies, as well as the knowledge, beliefs, arts, laws, customs, capabilities, and habits of the individuals in these groups.[1]

Humans acquire culture through the learning processes of enculturation and socialization, which is shown by the diversity of cultures across societies.

A cultural norm codifies acceptable conduct in society; it serves as a guideline for behavior, dress, language, and demeanor in a situation, which serves as a template for expectations in a social group. Accepting only a monoculture in a social group can bear risks, just as a single species can wither in the face of environmental change, for lack of functional responses to the change. Thus in military culture, valor is counted a typical behavior for an individual and duty, honor, and loyalty to the social group are counted as virtues or functional responses in the continuum of conflict. In the practice of religion, analogous attributes can be identified in a social group.

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 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.

Image : Highsnobiety

Sources : Wikipedia , EPDY , SBC.ONE

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