| Summary: | The aim of this paper is to explore some of the theoretical and empirical aspects of an economy which includes cultural capital. We use a simple dynamic growth model and the concept of a social accounting matrix (SAM) to illustrate how the addition of income flows and net changes of various natural and cultural resources can be incorporated into a broader measure of welfare. The Swedish reindeer industry, managed by the indigenous Sami people, is used as an example since it is generally regarded to have significant cultural heritage value, beyond its contribution to conventional national accounts. We discuss a theoretically correct compensation to a cultural sector for preserving and maintaining a cultural heritage. Furthermore, we attempt to estimate the cultural value of the Sámi Reindeer sector in Sweden using a CVM survey. The results suggest that the willingness to pay (per year) to maintain cultural heritage at least at the current level may be quite substantive, estimates showing it can be several times the industry's turnover per year. Capital theory Cultural capital Dynamic growth Natural capital Social accounting matrix
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