Do People Accept Different Cultures?

We present a model of the ethnic preferences of a minority group of immigrants and a majority group of natives for different cultures. We show that ethnic preferences change when there is an increase in minority populations or when the cost of accepting different culture decreases. First, minorities tend to accept different cultures, whereas the majority population tend to accept a different culture initially but reject it later. This is empirically supported by time series data on the number of foreign residents by nationality and municipality in Tokyo. Second, the number of firms producing minority-specific goods monotonically increases or shows an inverted U-shape. This is also empirically supported by cross-sectional data on the numbers of restaurants and residents by nationality and municipality in Tokyo.