Working Paper: CEPR ID: DP15765
Authors: Sandra Sequeira; Mattia Nardotto
Abstract: This paper examines how national identity affects day-to-day economic behavior. We exploit the Brexit referendum as a shock to the salience of identity and measure its impact on consumer choices in the UK, between British and EU grocery products. Drawing from a unique paneldataset with 12 million shoppers, we find that the referendum is associated with an increase in consumption of UK products (6%) and a reduction in demand for EU products (13%). Changes in consumption are driven by identity being top of mind: consumption of UK products is up to 7% higher during intense media discussions on Brexit, particularly during discussions on the politics of regaining sovereignty relative to the economic or social issues associated with Brexit. These findings underscore the importance of national identity in shaping routine economic decisions, and the mediating role that political events and the media can play by keeping identity top of mind.
Keywords: identity; media; consumer behavior; Brexit
JEL Codes: D12; D91; L15; M31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| media discussions on Brexit (F55) | identity salience (Z13) |
| identity salience (Z13) | consumer behavior (D19) |
| Brexit referendum (D79) | consumption of UK products (E20) |
| Brexit referendum (D79) | demand for EU products (F19) |
| presence of Union Jack on products (F36) | sales of UK products (F19) |
| intense media discussions on Brexit (F36) | consumption of UK products (E20) |