Do political conflicts influence daily consumption choices? Evidence from US-China relations

Celina Proffen and Lukas Jürgensmeier

Journal of Economic Behavior & Organization, 2024, vol. 220, issue C, 660-674

Abstract: Does political conflict with another country influence domestic consumers' daily consumption choices? We exploit the volatile US-China relations in 2018 and 2019 to analyze whether US consumers reduce their visits to Chinese restaurants when bilateral relations deteriorate. We measure the degree of political conflict through negativity in media reports and rely on smartphone location data to measure daily visits to over 190,000 US restaurants. A deterioration in US-China relations induces a significant decline in visits not only to Chinese but also to other foreign ethnic restaurants, while visits to typical American restaurants increase. We identify consumers' age, race, and cultural openness to moderate the strength of this ethnocentric effect.

Keywords: Political conflict; Consumption; Boycotts; Ethnocentrism (search for similar items in EconPapers)
JEL-codes: D12 D83 F51 P0 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:220:y:2024:i:c:p:660-674

DOI: 10.1016/j.jebo.2024.02.031

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