Economic theory of culture : a dynamic approach

Cultural capital is assumed to benefit all members of society. It is accumulated through theconsumption of cultural services and is diminished through depreciation. Using the stock ofcultural goods (e.g. cultural heritage, works of arts, literature and music), cultural services areprovided by the cultural services industry; the stock of cultural goods is enlarged by the flowof new cultural goods created by individuals who are both consumers and creators of cultureand whose utility is positively affected by the cultural goods they created. In the no-policymarket economy, individuals tend to ignore the positive external effects of their culturalservices consumption and creation of cultural goods on other individuals via augmentingcultural capital and cultural-goods stock. Consequently, less cultural capital and culturalgoodsstock will be accumulated. The efficient allocation can be restored by introducing anappropriate subsidy that stimulates the consumers? demand for cultural services, and thecreation of new cultural goods, promotes the accumulation of cultural capital and culturalgoods.