Identity, Media and Consumer Behavior

Speaker: Dr Sandra Sequeira, London School of Economics

Abstract: We examine how political events that sharpen identity can affect day to day economic behaviour, even in contexts that lack prescriptive social norms about group behaviour. We study the impact of the Brexit Referendum on consumer choices in the UK between British and EU grocery products. Using a unique panel dataset from a major retailer in the UK with almost a billion shopping trips for 12 million shoppers, we find that consumers respond to the referendum results by increasing consumption of UK products (by 3%) and reducing demand for EU products (by 12%). We provide further evidence that changes in consumption are driven by national identity being top of mind: the increase in consumption of UK products is 4% higher in days following intense social media discussion on Brexit. Consistent with the identity mechanism, this effect is stronger when there is more media discussion on the politics of regaining sovereignty as opposed to the economic consequences or the social issues associated with Brexit. Overall, these findings underscore the importance of political events associated with deep changes to perceived identity in shaping routine economic decisions, and the mediating role that the media can play by keeping identity top of mind.