Accounting for Tastes

Becker argues that past experiences and social influences form two basic capital stocks, personal and social, and applies these concepts to assessing the effects of advertising, the power of peer pressure, the nature of addiction, and the function of habits.

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Economists generally accept as a given the old adage that there’s no accounting for tastes. Nobel Laureate Gary Becker disagrees, and in this lively new collection he confronts the problem of preferences and values: how they are formed and how they affect our behavior. He argues that past experiences and social influences form two basic capital stocks: personal and social. He then applies these concepts to assessing the effects of advertising, the power of peer pressure, the nature of addiction, and the function of habits. This framework promises to illuminate many other realms of social life previously considered off-limits by economists.