Working Paper: CEPR ID: DP9101
Authors: Leonardo Bursztyn; Davide Cantoni
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 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 high intensity of pre-reunification advertisement. The effects vanish by 1998.
Keywords: Advertising; Communism; Consumption; East Germany; Media; Television
JEL Codes: D12; E21; Z10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Exposure to Western television (F69) | Aggregate consumption levels of East Germans post-reunification (E20) |
| Exposure to Western television (F69) | Composition of consumption (E20) |
| Advertising on Western television (M38) | Spending on goods (E20) |
| Distance to the West German border (F55) | Comparison of treatment and control groups (C90) |