DP15765 Identity, Media and Consumer Behavior

Author(s): Mattia Nardotto, Sandra Sequeira
Publication Date: February 2021
Keyword(s): Brexit, Consumer behavior, identity, media
JEL(s):
Programme Areas: Industrial Organization, International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15765

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 panel dataset 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.