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The Role of Television in Household Debt: Evidence from the 1950's

  • Baker Matthew J.

    ()

    (Hunter College and the Graduate Center, CUNY)

  • George Lisa M

    ()

    (Hunter College and the Graduate Center, CUNY)

We examine whether advertising increases household debt by studying the initial expansion of television in the 1950's. Exploiting the idiosyncratic spread of television across markets, we use micro data from the Survey of Consumer Finances to test whether households with early access to television saw steeper debt increases than households with delayed access. Results indicate that exposure to television advertising increases the tendency to borrow for household goods and the tendency to carry debt. Television access is associated with higher debt levels for durable goods, but not with the total amount of non-mortgage debt. We provide suggestive evidence that increased labor supply may drive our results. The role of media in household debt may be greater than suggested by existing research.

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Article provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.

Volume (Year): 10 (2010)
Issue (Month): 1 (May)
Pages: 1-38

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Handle: RePEc:bpj:bejeap:v:10:y:2010:i:1:n:41
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