Non-Separable Time Preferences and Novelty Consumption: Theory and Evidence from the East German Transition to Capitalism

Davide Dragone and Nicolas Ziebarth ()

Health, Econometrics and Data Group (HEDG) Working Papers from HEDG, c/o Department of Economics, University of York

Abstract: Non-separable intertemporal preferences and novelty consumption can explain the persistent correlation between economic development and obesity. Employing the German reunification as a fast motion natural experiment of economic development, we study how the sudden availability of novel food products impacts individual consumption patterns and body weight. Immediately after the reunification, East Germans consumed more novel western food and gained more weight than West Germans. The subsequent long-run persistence in food consumption and body weight among Eastern Germans cannot be explained by taste for variety; it provides evidence for habit formation in intertemporal consumption preferences.

Keywords: economic development; food consumption; German reunification; habit formation; learning; novel goods; obesity (search for similar items in EconPapers)
JEL-codes: D11 D12 D92 E21 I12 I15 L66 O10 O33 Q18 R22 (search for similar items in EconPapers)
Date: 2015-10
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Working Paper: Non-Separable Time Preferences and Novelty Consumption: Theory and Evidence from the East German Transition to Capitalism (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:yor:hectdg:15/28

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