Cultural Capital and the Consumption of Cultural Services

Cultural capital is assumed to benefit all members of society. It is built up by the aggregate consumption of cultural services and is diminished through depreciation. Cultural goods (e.g. cultural heritage, works of arts, literature and music) turn out to give rise to a flow of cultural services. In the no-policy market economy, consumers tend to ignore the beneficial external effects of their cultural service consumption on the other consumers (and on themselves) through augmenting cultural capital. Cultural Services will be less consumed and, as a result, cultural capital will be underprovided. The efficient allocation is shown to be restored by an appropriate subsidy on cultural services that stimulates the consumers demand for cultural services and thus promotes the accumulation of cultural capital