<p>The most common view in economics of what changing tastes are is in terms of Strotz-Pollak-type multiple-selves models. There, the overall evaluation of future consumption streams changes. The way you've written down the problem doesn't really allow one to formulate this.</p>
<p>Here is a setting that illustrates the basic structure: There is a space of instantaneous consumptions <span class="math-container">$X$</span> and for each period <span class="math-container">$T$</span> a utility function <span class="math-container">$U^T:X^{T-1}\times X^\infty\to\mathbb{R}$</span>. Consumption streams are infinite to save on notation. The interpretation is that <span class="math-container">$U^T$</span> gives in period <span class="math-container">$T$</span>, depending on past consumption in <span class="math-container">$X^{T-1}$</span>, preferences over future consumption streams in <span class="math-container">$X^\infty$</span>. If tastes never change,
we would have for two consumption streams <span class="math-container">$(x_1,\ldots,x_{T-1},x_T,x_{T+1},\ldots)$</span> and <span class="math-container">$(x_1,\ldots,x_{T-1},y_T,y_{T+1}\ldots)$</span> that have the same consumption in the first <span class="math-container">$T-1$</span> periods that
<span class="math-container">$$U^1(x_1,\ldots,x_{T-1},x_T,x_{T+1},\ldots)\geq U^1(x_1,\ldots,x_{T-1},y_T,y_{T+1}\ldots)$$</span> holds if and only if
<span class="math-container">$$U^T\big((x_1,\ldots,x_{T-1}),(x_T,x_{T+1},\ldots)\big)\geq U^T\big((x_1,\ldots,x_{T-1}),(y_T,y_{T+1},\ldots)\big).$$</span>
If this is not the case, tastes change. Since people have different preferences at different periods, there are many ways to model the resulting actual behavior between the various &quot;selves.&quot;</p>
<p>In this formulation, preferences need not be additively separable, and no instantaneous utility function needs to exist. However, we may assume such a representation. Then, there are for any two periods <span class="math-container">$T$</span> and <span class="math-container">$t$</span> a function <span class="math-container">$u_t^T$</span> such that
<span class="math-container">$$U^T\big((x_1,\ldots,x_{T-1}),(x_T,x_{T+1},\ldots)\big)=u_1^T(x_1)+\ldots+u^T_{T_1}+\sum_{h=0}^\infty u^T_{T+h}(x_{T+h}).$$</span>
In such a setting, past consumption is irrelevant.</p>
<p>The <a href="https://www.jstor.org/stable/1807222" rel="nofollow noreferrer">approach of Becker and Stigler</a> is one in which tastes never change, but preferences over future consumption can depend on past consumption via some aggregates they view as capital. They argue that this can account for most situations in which tastes seemingly change. Becker's book elaborates on the point. But from the perspective of most economists working on changing tastes, Becker is arguing that preferences are not or, at least, that they are best interpreted as not changing.</p>

CC BY-SA 4.0
2024-01-24T11:00:17.777Z
2024-01-24T11:00:17.777Z
Michael Greinecker
<p>What are <strong>tastes</strong> referring to?</p>
<p>I have always considered them to be the instantaneous part of dynamic utility function:</p>
<p><span class="math-container">$$U = u_1(x_1) + u_2(x_2) + \dots u_t(x_t)$$</span></p>
<p>Where <span class="math-container">$u_s$</span> denotes tastes in the following (instantaneous) sense:</p>
<blockquote>
<p>&quot;Beer tastes me more than wine&quot; or &quot;bread will taste me more than baguette&quot;</p>
</blockquote>
<p>However, when reading Becker's Accounting for tastes, I get the feeling that tastes describe rather those overall feelings of a person, hence, the whole (overall) utility function.</p>
<p>Therefore, when speaking about <strong>&quot;changing tastes&quot;</strong>, are economists usually speaking about <span class="math-container">$u_1 \neq u_2$</span> or about general shifts in <span class="math-container">$U$</span>?</p>

<microeconomics><definition>
Tastes: instantaneous or overall utility function
Athaeneus
# Tastes: instantaneous or overall utility function

(Asked by: username_0 on 2024-01-23)

What are **tastes** referring to?

I have always considered them to be the instantaneous part of dynamic utility function:

$$U = u\_1(x\_1) + u\_2(x\_2) + \dots u\_t(x\_t)$$

Where $u\_s$ denotes tastes in the following (instantaneous) sense:

> "Beer tastes me more than wine" or "bread will taste me more than baguette"

However, when reading Becker's Accounting for tastes, I get the feeling that tastes describe rather those overall feelings of a person, hence, the whole (overall) utility function.

Therefore, when speaking about **"changing tastes"**, are economists usually speaking about $u\_1 \neq u\_2$ or about general shifts in $U$?

**Tags:** microeconomics, definition

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## 1 answers

### Answer by username_1 on 2024-01-24. Score: 3 | Accepted answer

The most common view in economics of what changing tastes are is in terms of Strotz-Pollak-type multiple-selves models. There, the overall evaluation of future consumption streams changes. The way you've written down the problem doesn't really allow one to formulate this.

Here is a setting that illustrates the basic structure: There is a space of instantaneous consumptions $X$ and for each period $T$ a utility function $U^T:X^{T-1}\times X^\infty\to\mathbb{R}$. Consumption streams are infinite to save on notation. The interpretation is that $U^T$ gives in period $T$, depending on past consumption in $X^{T-1}$, preferences over future consumption streams in $X^\infty$. If tastes never change,
we would have for two consumption streams $(x\_1,\ldots,x\_{T-1},x\_T,x\_{T+1},\ldots)$ and $(x\_1,\ldots,x\_{T-1},y\_T,y\_{T+1}\ldots)$ that have the same consumption in the first $T-1$ periods that
$$U^1(x\_1,\ldots,x\_{T-1},x\_T,x\_{T+1},\ldots)\geq U^1(x\_1,\ldots,x\_{T-1},y\_T,y\_{T+1}\ldots)$$ holds if and only if
$$U^T\big((x\_1,\ldots,x\_{T-1}),(x\_T,x\_{T+1},\ldots)\big)\geq U^T\big((x\_1,\ldots,x\_{T-1}),(y\_T,y\_{T+1},\ldots)\big).$$
If this is not the case, tastes change. Since people have different preferences at different periods, there are many ways to model the resulting actual behavior between the various "selves."

In this formulation, preferences need not be additively separable, and no instantaneous utility function needs to exist. However, we may assume such a representation. Then, there are for any two periods $T$ and $t$ a function $u\_t^T$ such that
$$U^T\big((x\_1,\ldots,x\_{T-1}),(x\_T,x\_{T+1},\ldots)\big)=u\_1^T(x\_1)+\ldots+u^T\_{T\_1}+\sum\_{h=0}^\infty u^T\_{T+h}(x\_{T+h}).$$
In such a setting, past consumption is irrelevant.

The [approach of Becker and Stigler](https://www.jstor.org/stable/1807222) is one in which tastes never change, but preferences over future consumption can depend on past consumption via some aggregates they view as capital. They argue that this can account for most situations in which tastes seemingly change. Becker's book elaborates on the point. But from the perspective of most economists working on changing tastes, Becker is arguing that preferences are not or, at least, that they are best interpreted as not changing.


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