Accounting for tastes (Becker)

As Becker observes, once people's basic needs for food, shelter, and rest are met, their consumption depends very much on how their tastes are formed - on childhood experiences and on social and cultural influences. For many kinds of behavior, there is a strong positive effect of past behavior on current behavior, and there are strong peer effects. Thus, whether a person currently smokes or uses drugs depends significantly on whether he has smoked or taken drugs in the past. And his choice of music, movies, and books depends to a large extent on what his friends and associates have to say about them. Becker argues that, for a large class of behavior, decisions on what to consume are not independent of one another but are interdependent. He incorporates past experiences and social influences into preferences or tastes through two basic capital stocks, which he calls personal capital and social capital. At any moment in time, what a person wants depends not only on the menu of goods he can choose from and their prices but also on his current stock of personal and social capital. Behaviors that raise or lower these stocks (trying out the popular new drug, joining on upscale health club) will change his future desires and choices. (B)