Economic Development, Novelty Consumption, and Body Weight: Evidence from the East German Transition to Capitalism

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 following long-run persistence of food consumption and body weight patterns among Eastern Germans cannot be explained by taste for variety, and it provides evidence for habit formation in intertemporal consumption preferences.