Paper: Guiso, Sapienza & Zingales (2006)

JEP paper
* To some extent this leaves me asking: 'so what'? I think that in most economics, we accommodate heterogeneous preferences. What are the implications of those preferences being determined (in part) by culture? E.g. versus being 'inert/intrinsic/natural/biologica' or something? In a way, asking "does culture affects economic outcomes?" is like asking "do preferences/beliefs affect economic outcomes?". We already know they do. These are the primitives of our models. If we take preferences and beliefs as given as in the cultural approach, we may gain a better understanding in the heterogeneity of economic outcomes. But, fundamentally, we are not changing anything about the economic method or toolkit it seems? In other words, we are not learning about new mechanisms but about the differences in primatives.
== Summary ==
=== 1. Introduction ===
Recently, better techniques and more data have made it possible to identify systematic differences in people's preferences and beliefs and to relate them to various measures of cultural legacy. This paper summarizes this approach, its achievements so far, and directions for future research at the end.
A necessary first step is to define culture in a sufficiently narrow way, so that it becomes easier to identify a causal link from culture to economic outcomes. We define culture as: "those customary beliefs and values that ethnic, religious, and social groups transmit fairly unchanged from generation to generation".
The approach, in steps:
# Show a direct impact of culture on (1) expectations, and (2) preferences. Either through survey (most common) or experimental data.
# Show that these (1) beliefs/expectations, and (2) preferences/values impact economic outcomes.
# All work on culture faces the problem that causality is likely to work both ways. To claim a causal link, the above definition suggests to focus on those dimensions of culture that are inherited by an individual from previous generations, rather than voluntarily accumulated. "In this spirit, we restrict our attention (...) to those cultural aspects like religion and ethnic background that can largely be treated as invariant over an individual's lifetime.""Individuals have less control overtheir culture than over other social capital. They cannot alter their ethnicity, race or family history, and only with difficulty can they change their country or religion. Because of the difficulty of changing culture and its low depreciation rate, culture is largely a ‘given’ to individuals throughout their lifetimes." (Becker, 1996, "Preferences and Values", in Accounting for Tastes. p.16)
The causality would come from using the cultural components of beliefs and preferences as IV's. This is only valid if culture affects the economic outcome only through the channel assumed in the regression (exclusion restriction), which is unlikely to be met in many applications. Note: restricting attention to the inherited, slow-moving component sof culture differentiates this approach from the social interaction literature as surveyed by Manski (2000), which focuses on peer-group effects that can be viewed as the fast-moving component of culture.Manski,Charles F. 2000 “Economic Analysis of Social Interactions.” Journal of Economic Perspectives. 14:3, pp. 115–36. 
Why do some cultural influences change so slowly? They conjecture three explanations, but whatever the explanation, it enables us to use 'deeper' aspects of culture like ethnic origin or religion as exogenous variables and thus reduce the reverse causality risk in regressions that explore the impact of culture on economic outcomes.
=== 2. Historical Perspectives on Economics and Culture ===
==== The Origin of the Debate ====
Marx, Weber, Gramsci, and Polanyi.
==== Economic Imperialism ====
==== The Non-Economists ====
==== Towards a New Cultural Economics? ====
=== 3. Culture, Prior Beliefs, and Economic Outcomes ===
Most/all of the literature they refer to is related to trust as a type of belief. Not other beliefs?
==== The Effect of Culture on Prior Beliefs ====
==== The Effect of Prior Beliefs on Economic Outcomes ====
==== Reduced Form Approach ====
=== 4. Culture, Preferences/Values, and Economic Outcomes ===
Distinguish between economic preferences (e.g. fertility, or labor market participation), and political preferences (e.g. for fiscal redistribution). 
==== The Effect of Culture on Economic Preferences ====
==== From Individual Preferences to Economic Outcomes ====
==== The Effect of Culture on Political Preferences ====
==== From Political Preferences to Economic Outcomes ====
=== 5. Culture and Institutions ===
=== 6. Conclusions ===