Does culture affects the economy? Economists do not recognize culture as a determinant of economy. The most difficult question is – What exactly is culture? Due to this ambiguous nature of culture, economists have been reluctant to include it as a variable. In common parlance culture is the beliefs and life style that people inherit from their Parents and family. So indeed it affects economy.
It has been observed that people of a certain culture behave in a defined manner. So you will find that the economic behavior of different cultural groups also is different.
The debate on whether culture affects economy is not new. Adam Smith the father figure of economics started it. But there has been conflicting view. Two of the greats Karl Marx and John Stuart Mill had opposing views on individual and cultural influence. Mill was of the view that culture affects the economy more than the individual. However Karl Marx believed that individual was greater than culture while performing economic activities.
So, the decisions which are economic are affected by culture. Decisions like buying house are economic decisions, but are totally affected by presence of cultural groups. Two sub factors of culture are most prominent – Country of origin and religion. Hence an Italian immigrant to United Kingdom would like to buy a house in the neighborhood where Italians live. Another sub factor is religion, which affects most of our economic decisions. So a Muslim and Catholic will have different buying behavior. This is where marketers can make their mark.