Partisan Consumers

We analyze micro-level data in consumer purchases from 2007 to 2020 and find an increase in partisanship in consumer purchases. Households identified as Republicans increasingly favor brands preferred by other Republicans, and vice-versa for Democraticleaning consumers. This segmentation sorts brands into red products and blue products. Aggregating up to the firm-level, the partisan imbalance of an average firm's consumer base increases in the earlier years but plateau shortly thereafter. Additional analysis indicate that firms respond to heightened product partisanship by offering products that appeal to both political factions as increased partisanship correlates with reduced firm profitability.

Keywords: Political Risk, Product Markets, Partisanship, Customer Segmentation

JEL Classification: D12, G10, G30, P16

Suggested Citation: Suggested Citation

Hsieh, Chin Hui and Low, Angie and Sharma, Varun and Zhu, Qifei, Partisan Consumers (August 14, 2024). Kilts Center at Chicago Booth Marketing Data Center Paper, Nanyang Business School Research Paper No. 25-01, Available at SSRN: https://ssrn.com/abstract=5046064 or http://dx.doi.org/10.2139/ssrn.5046064