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Exogenous Preferences, and Endogenous Tastes / Exogene Präferenzen und endogener Geschmack

Author

Listed:
  • Ebert Udo

    (Fachbereich 4, Universität Oldenburg, Institut für Volkswirtschaftslehre, D-26111 Oldenburg)

  • Hagen Oskar von dem

    (PD, PhD, Fachbereich 4, Universität Oldenburg, Institut für Volkswirtschaftslehre, D-26111 Oldenburg)

Abstract

This paper presents a unifying approach to modelling endogenous tastes. Tastes are defined as orderings of a subspace of a (suitable chosen) commodity space. Using this definition endogenous tastes are analytically similar to externalities. Accordingly, many models in economic theory can be interpreted as dealing with endogenous tastes. It is shown that changes in tastes have a direct and an indirect impact on welfare. The literature on externalities usually focuses on the direct effect while the literature on endogenous tastes mainly deals with the indirect effect. The analysis focuses on two main aspects of variable tastes: the institutional question (who influences tastes) and the technological question (what does it cost). The allocative inefficiency of an economic system with endogenous tastes is demonstrated and Pigouvian-type corrective taxes are discussed.The unifying framework presented in this paper can be used to analyze and discuss a wide variety of variable tastes.

Suggested Citation

  • Ebert Udo & Hagen Oskar von dem, 2002. "Exogenous Preferences, and Endogenous Tastes / Exogene Präferenzen und endogener Geschmack," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 222(5), pages 513-530, October.
    • Handle: RePEc:jns:jbstat:v:222:y:2002:i:5:p:513-530
    DOI: 10.1515/jbnst-2002-0502
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    References listed on IDEAS

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