Experience and Identity-driven Consumer Choice: Evidence from China

48 Pages Posted: 26 Aug 2020 Last revised: 30 Sep 2021

See all articles by Nan Chen

Nan Chen

National University of Singapore (NUS) - School of Computing

Lei Huang

Massachusetts Institute of Technology (MIT)

Zemin (Zachary) Zhong

University of Toronto, Rotman School of Management

Date Written: July 17, 2020

Abstract

We study the long-term effect of political experiences on consumers' identity-driven brand choices. Our empirical strategy employs a generalized difference-in-differences design to exploit cohort variations in the number of impressionable years during China's Cultural Revolution (CR), a radical political movement that lasted from 1966 to 1976, and spatial variations in the intensity of CR. We observe over 10 million vehicle choices of individual Chinese consumers from 2012 to 2013. We find that intense CR experience increases the likelihood of choosing Chinese brands, controlling for location, birth-year cohort, and product attributes. Furthermore, the effect is only significant after the 2012 China-Japan conflict that activated nationalistic sentiments. The dynamics show the effect persisted over 15 months after the activation. The effects are stronger for more recognizable Chinese brands and for more expensive vehicles. We rule out alternative mechanisms such as social norm compliance.

Keywords: Identity, Nationalism, Consumer Preference

JEL Classification: F52, L10, M30, N45, P26

Suggested Citation

Chen, Nan and Huang, Lei and Zhong, Zemin (Zachary), Experience and Identity-driven Consumer Choice: Evidence from China (July 17, 2020). Available at SSRN: https://ssrn.com/abstract=3656359 or http://dx.doi.org/10.2139/ssrn.3656359

Nan Chen

National University of Singapore (NUS) - School of Computing ( email )

13 Computing Drive
Computing 1
Singapore 117543, 117417
Singapore

HOME PAGE: http://sites.google.com/site/ttnanchen

Lei Huang

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Zemin (Zachary) Zhong (Contact Author)

University of Toronto, Rotman School of Management ( email )

105 St. George St.
Rotman School of Management
Toronto, Ontario M5S 3E6
Canada

HOME PAGE: http://zacharyzhong.com

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