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

Author Info

  • Baker Matthew J.

    ()

    (Hunter College and the Graduate Center, CUNY)

  • George Lisa M

    ()

    (Hunter College and the Graduate Center, CUNY)

Abstract

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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Find related papers by JEL classification:
  • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
  • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
  • D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Television, the root of the crisis?
    by Economic Logician in Economic Logic on 2009-12-04 15:15:00
  2. The BBC & household debt
    by chris dillow in Stumbling and Mumbling on 2009-10-02 13:01:15
  3. links for 2009-10-05
    by Brad DeLong in Grasping Reality with the Invisible Hand on 2009-10-05 08:04:08
  4. Uses of illiteracy
    by chris dillow in Stumbling and Mumbling on 2014-09-10 13:58:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:

  1. Ascensión Andina-Díaz, 2015. "Competition and uncertainty in a paper’s news desk," Journal of Economics, Springer, vol. 116(1), pages 77-93, September.
  2. Bursztyn, Leonardo & Cantoni, Davide, 2012. "A Tear in the Iron Curtain: The Impact of Western Television on Consumption Behavior," Discussion Papers in Economics 13949, University of Munich, Department of Economics.
  3. Benedetto Molinari & Francesco Turino, 2016. "Advertising and Aggregate Consumption: A Bayesian DSGE Assessment," Working Paper Series 16-15, The Rimini Centre for Economic Analysis.
  4. Anderson, Simon P & Foros, Øystein & Kind, Hans Jarle, 2015. "Competition for advertisers and for viewers in media markets," CEPR Discussion Papers 10608, C.E.P.R. Discussion Papers.

This item is featured on the following reading lists or Wikipedia pages:

  1. Economic Logic blog

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