Experience and Identity-driven Consumer Choice: Evidence from China
48 Pages Posted: 26 Aug 2020 Last revised: 30 Sep 2021
Date Written: July 17, 2020
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
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