TY - JOUR

T1 - Conspicuous consumption and political regimes

T2 - Evidence from East and West Germany

AU - Friehe, Tim

AU - Mechtel, Mario

PY - 2014/4

Y1 - 2014/4

N2 - This paper investigates the influence of political regimes on the relative importance of conspicuous consumption. We use the division of Germany into the communist GDR and the democratic FRG and its reunification in 1990 as a natural experiment. Relying on household data that are representative for Germany, our empirical results strongly indicate that conspicuous consumption is relatively more important in East Germany. Significantly, although we find some convergence, a considerable gap in conspicuous consumption expenditures remains even 18 years after the German reunification.

AB - This paper investigates the influence of political regimes on the relative importance of conspicuous consumption. We use the division of Germany into the communist GDR and the democratic FRG and its reunification in 1990 as a natural experiment. Relying on household data that are representative for Germany, our empirical results strongly indicate that conspicuous consumption is relatively more important in East Germany. Significantly, although we find some convergence, a considerable gap in conspicuous consumption expenditures remains even 18 years after the German reunification.

KW - Economics

KW - Behavioral economics

KW - Conspicuous consumption

KW - Political regime

KW - Status-seeking

UR - http://www.scopus.com/inward/record.url?scp=84893917300&partnerID=8YFLogxK

U2 - 10.1016/j.euroecorev.2014.01.005

DO - 10.1016/j.euroecorev.2014.01.005

M3 - Journal articles

VL - 67

SP - 62

EP - 81

JO - European Economic Review

JF - European Economic Review

SN - 0014-2921

ER -