Cultural Demand and Consumption Capital Victoria Ateca Amestoy centrA: (Fundación Centro de Estudios Andaluces), IESA – CSIC, Spain

If cultural appreciation is a need that requires some “skill” apart from the mere consumption of cultural goods in order to capture their meaning: How does the optimal consumption path evolve Compare optimal consumption and aggregate demand if cultural goods were plain goods with aggregate demand with consumption capital “Learning by Consuming” Levy-Garboua & Montmarquette (1996) Stigler & Becker (1977)

Individual decision making: single agent consumer problem 2 periods lifetime: YOUNG (t=1) and OLD (t=2) 2 basic needs: Cultural appreciation: ; cultural good consumed Other: ; is numeraire Optimal decision making based on 2 types of conditions: Personal characteristics: Taste (  ), impatience (  ), memory (r=1-  ) Exogenous: income (w), prices (p,1), initial capital endowment (s 1 )

Consumer problem ß rho ß

Consumer problem

Demand path

Optimal consumption of cultural good on period 1 Path: stimulus to “over”-consume in the first period Since area for which increasing on

Life consumption - expenditure Under the first model On the second model

Life consumption comparison

Exogenous variables that are succeptible to be manipulated by cultural policy-makers: s: initial endowment when young (education/interpretation facilities in order to make consumption more productive to satisfy need) p: price of the cultural good (subsidized of taxed)

further 1.Integrate this simple discrete dynamic effect into a society in which consumption externalities are captured (Sable & Kling, 2001) 2.Competitive equilibria and Optimal Pareto outcomes in a dynamic setting (Donaldson & Blackorby)