THE PSYCHOECONOMIC APPROACH TO CREATIVITY

The psychoeconomic model of the creative process is introduced in this article. This theoretical model utilizes the concept of human capital and postulates the existence of creative potential for each individual as the product of initial endowments and active investments in creative ability. The model predicts how much of an investment individuals are likely to make, and shows how this depends upon intrinsic and extrinsic factors. Like investments in education, the pursuit of creativity is based on consideration of costs (including psychic and temporal) and the expected benefits. Education and creative potential differ in several ways, leading the psychoeconomic model to predict that individuals will invest in these two forms of human capital in different ways. The model also uses the supply and demand framework to explain the rate of creative activity in several areas (e.g., art, business, research). The costs of producing creative ideas and the benefits to the individual and others are shown to be influential. Finally, the model is applied to the question of allocative efficiency, and suggests that society may be misallocating its resources. In this view, society as a whole would be better off shifting resources from other activities into the creative sphere.