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Title:Conspicuous consumption and communism: Evidence from East and West Germany PDF Logo
Authors:Friehe, Tim
Mechtel, Mario
Issue Date:2012
Series/Report no.:CESifo Working Paper: Public Finance 3922
Abstract:This paper investigates the influence of the political regime on the relative importance of conspicuous consumption. We use the separation 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. Importantly, a significant gap in conspicuous consumption expenditures remains even 18 years after the reunification.
Subjects:conspicuous consumption
status-seeking
relative income
political regime
behavioral economics
JEL:D12
D62
P36
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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