Growth, Preference Change, and Population Dynamics

This chapter introduces endogenous preference changes. The previous chapters studied various issues of economic evolution with exogenous preferences. Except for preference changes, other aspects of the model are similar to the model in Chap. 2 . Preference change has been recognized by economists even since Adam Smith, but it may be argued that economics still lacks proper analytical frameworks for analyzing interactions between preference change, population change, and economic growth. This chapter is organized as follows. Section 9.1 defines the growth model with habit and preference dynamics. Section 9.2 examines the dynamics and its properties. Section 9.3 shows what happens to the system if more weights are given to the habit stock of children. Section 9.4 is a change in the impact of the wife’s wage rate on the propensity to have children. Section 9.5 analyses the changes in the system over time when the wife weighs less the habit stock of leisure time. Section 9.6 studies the effects of a change in the wife’s habit stock of leisure time. Section 9.7 studies the effects of a change in the impact of the wife’s wage rate. Section 9.8 shows how the system reacts to an improvement in women’s human capital. Section 9.9 plots the motion of the system when the total factor productivity is enhanced. Section 9.10 shows what happens to the system when the mother spends more time on each child fostering. Section 9.11 concludes the chapter.