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

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.