| 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. |