A Tear in the Iron Curtain: The Impact of Western Television on Consumption Behavior
49 Pages Posted: 28 Sep 2012
Date Written: August 2012
This paper examines the impact of exposure to foreign media on the economic behavior of agents in a totalitarian regime. We study private consumption choices focusing on former East Germany, where differential access to Western television was determined by geographic features. Using data collected after the transition to a market economy, we find no evidence of a significant impact of previous exposure to Western television on aggregate consumption levels. However, exposure to Western broadcasts affects the composition of consumption, biasing choices in favor of categories of goods with high intensity of pre-reunification advertisement. The effects vanish by 1998.
Keywords: Advertising, Communism, Consumption, East Germany, Media, Television
JEL Classification: D12, E21, Z10
Suggested Citation: Suggested Citation