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Learning-by-Consuming and the Dynamics of the Demand and Prices of Cultural Goods


  • Paulo Brito


  • Carlos Barros



The major distinctive feature of cultural goods is that consumers must learn how to consume them, implying that preferences should be modelled as intertemporally dependent. The canonical model in the literature uses a habit formation analogy. In this paper, we discuss in detail, though in the simplest setup, a consistent preference structure for that model. Then, we derive the implications for the dynamics of two aggregate equilibrium models, a fixed price model and a flexible price model. The learning-by-consuming behaviour is characterised by a preference structure displaying bounded adjacent complementarity in the demand for the cultural good. This implies that there will be short run complementarity between the stocks of culture and financial wealth and that the adjustment of the demand for cultural goods, or of their relative price, will have some inertia. In the exogenous price model, we find that increases in income will raise the long run demand for cultural goods while increases in the relative price will decrease it. In the endogenous price model, an increase in the supply of cultural goods will imply an initial undershooting of the price of cultural goods followed by an upward transition process. Our results seem to be consistent with the empirical results on the demand for cultural goods and seem to offer an explanation for the Baumol and Bowen paradox. Copyright Springer Science + Business Media, Inc. 2005

Suggested Citation

  • Paulo Brito & Carlos Barros, 2005. "Learning-by-Consuming and the Dynamics of the Demand and Prices of Cultural Goods," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 29(2), pages 83-106, May.
  • Handle: RePEc:kap:jculte:v:29:y:2005:i:2:p:83-106 DOI: 10.1007/s10824-005-1748-0

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    References listed on IDEAS

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    Cited by:

    1. Jaeok Park, 2015. "Cultural Barriers in International Trade and the," Korean Economic Review, Korean Economic Association, vol. 31, pages 267-300.
    2. Campaniello, N & Richiardi, M, 2015. "The role of museums in bilateral tourist flows: Evidence from Italy," Economics Discussion Papers 15638, University of Essex, Department of Economics.
    3. Peter Earl & Jason Potts, 2013. "The creative instability hypothesis," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 37(2), pages 153-173, May.
    4. Marco Guerzoni & Massimiliano Nuccio, 2014. "Music consumption at the dawn of the music industry: the rise of a cultural fad," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 38(2), pages 145-171, May.
    5. Ormerod, Paul, 2015. "The economics of radical uncertainty," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 9, pages 1-20.
    6. Leroch, Martin A. & Wellbrock, Christian M., 2011. "Saving newspapers with public grants – The effects of press subsidies on the provision of journalistic quality," Information Economics and Policy, Elsevier, vol. 23(3), pages 281-286.
    7. Louis Lévy-Garboua & Claude Montmarquette, 2011. "Demand," Chapters,in: A Handbook of Cultural Economics, Second Edition, chapter 26 Edward Elgar Publishing.
      • Louis Lévy-Garboua & Claude Montmarquette, 2003. "Demand," Chapters,in: A Handbook of Cultural Economics, chapter 25 Edward Elgar Publishing.
    8. Sangho KIM & Donghyun PARK, 2010. "Addictive behavior in cinema demand: evidence from Korea," Economic Growth Centre Working Paper Series 1002, Nanyang Technological University, School of Social Sciences, Economic Growth Centre.
    9. José Manuel Madeira Belbute & Paulo Brito, 2006. "On Intertemporal Dependent Preferences with regard Environmental Goods and Services," Economics Working Papers 06_2006, University of Évora, Department of Economics (Portugal).
    10. Marco Alderighi & Eleonora Lorenzini, 2012. "Cultural goods, cultivation of taste, satisfaction and increasing marginal utility during vacations," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 36(1), pages 1-26, February.
    11. Keita Kinjo & Shinya Sugawara, 2014. "An Empirical Analysis for a Case-based Decision to Watch Japanese TV dramas," CIRJE F-Series CIRJE-F-940, CIRJE, Faculty of Economics, University of Tokyo.
    12. Juan Gabriel Brida & Chiara Dalle Nogare & Raffaele Scuderi, 2016. "Frequency of museum attendance: motivation matters," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 40(3), pages 261-283, August.
    13. Juan Gabriel Brida & Chiara Dalle Nogare & Raffaele Scuderi, 2014. "How often to a museum? Motivations matter," BEMPS - Bozen Economics & Management Paper Series BEMPS16, Faculty of Economics and Management at the Free University of Bozen.
    14. Cellini, Roberto & Cuccia, Tiziana, 2017. "How free admittance affects charged visits to museums: An analysis of the Italian case," MPRA Paper 78067, University Library of Munich, Germany.
    15. Affortunato Francesca & Castagna Alina & Crociata Alessandro & D'Angelo Francesca, 2010. "Evaluating The Culture-Led Regeneration," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 1062-1066, December.
    16. Nadia Campaniello & Matteo Richiardi, 2011. "Beggar-thy-neighbor in Art Consumption: Evidence from the “Bel Paese”," LABORatorio R. Revelli Working Papers Series 116, LABORatorio R. Revelli, Centre for Employment Studies.


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