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

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  • 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.

Suggested Citation

  • Baker Matthew J. & George Lisa M, 2010. "The Role of Television in Household Debt: Evidence from the 1950's," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-38, May.
    • Handle: RePEc:bpj:bejeap:v:10:y:2010:i:1:n:41
    DOI: 10.2202/1935-1682.2393
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. links for 2009-10-05
      by Brad DeLong in Grasping Reality with the Invisible Hand on 2009-10-05 13:04:08
    2. Television, the root of the crisis?
      by Economic Logician in Economic Logic on 2009-12-04 21:15:00
    3. The BBC & household debt
      by chris dillow in Stumbling and Mumbling on 2009-10-02 18:01:15
    4. Uses of illiteracy
      by chris dillow in Stumbling and Mumbling on 2014-09-10 18:58:00

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    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 - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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