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Tear in the Iron Curtain: The Impact of Western Television on Consumption Behavior

Author

Listed:
  • Leonardo Bursztyn

    (UCLA Anderson School of Management)

  • Davide Cantoni

    (University of Munich, CEPR, and CESifo)

Abstract

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 the 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 a high intensity of prereunification advertisement. The effects vanish by 1998.

Suggested Citation

  • Leonardo Bursztyn & Davide Cantoni, 2016. "Tear in the Iron Curtain: The Impact of Western Television on Consumption Behavior," The Review of Economics and Statistics, MIT Press, vol. 98(1), pages 25-41, March.
  • Handle: RePEc:tpr:restat:v:98:y:2016:i:1:p:25-41
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    Keywords

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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