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Non-separable time preferences, novelty consumption and body weight: Theory and evidence from the East German transition to capitalism

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  • Dragone, Davide
  • Ziebarth, Nicolas R.

Abstract

This paper develops a dynamic model to illustrate how diet and body weight change when novel food products become available to consumers. We propose a microfounded test to empirically discriminate between habit and taste formation in intertemporal preferences. Moreover, we show that ‘novelty consumption’ and endogenous preferences can explain the persistent correlation between economic development and obesity. By empirically studying the German reunification, we find that East Germans consumed more novel Western food and gained more weight than West Germans when a larger variety of food products became readily accessible after the fall of the Wall. The observed consumption patterns suggest that food consumption features habit formation.

Suggested Citation

  • Dragone, Davide & Ziebarth, Nicolas R., 2017. "Non-separable time preferences, novelty consumption and body weight: Theory and evidence from the East German transition to capitalism," Journal of Health Economics, Elsevier, vol. 51(C), pages 41-65.
  • Handle: RePEc:eee:jhecon:v:51:y:2017:i:c:p:41-65
    DOI: 10.1016/j.jhealeco.2016.11.002
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    6. Nathalie Mathieu-Bolh & Ronald Wendner, 2021. "Conspicuous leisure, time allocation, and obesity Kuznets curves," Graz Economics Papers 2021-09, University of Graz, Department of Economics.
    7. Sascha O. Becker & Lukas Mergele & Ludger Woessmann, 2020. "The Separation and Reunification of Germany: Rethinking a Natural Experiment Interpretation of the Enduring Effects of Communism," Journal of Economic Perspectives, American Economic Association, vol. 34(2), pages 143-171, Spring.
    8. Paolo Nicola Barbieri, 2022. "Social distortion in weight perception: a decomposition of the obesity epidemic," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(2), pages 685-713, July.
    9. Biroli, Pietro & Boneva, Teodora & Raja, Akash & Rauh, Christopher, 2018. "Parental Beliefs about Returns to Child Health Investments," IZA Discussion Papers 11336, Institute of Labor Economics (IZA).
    10. Nathalie Mathieu-Bolh, 2021. "Economic Stress and Body Weight During the COVID-19 Pandemic," Studies in Microeconomics, , vol. 9(2), pages 256-282, December.
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    14. Ziebarth Nicolas R., 2018. "Biased Lung Cancer Risk Perceptions: Smokers are Misinformed," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 238(5), pages 395-421, September.
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    More about this item

    Keywords

    Endogenous preferences; Food consumption; Novel goods; Habit formation; Obesity; Economic development; German reunification;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • R22 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other Demand

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