The causal effect of watching TV on material aspirations: Evidence from the “valley of the innocent”

The paper addresses the question of whether TV consumption has an impact on material aspirations. We exploit a natural experiment that took place during the period in which Germany was divided. Owing to geographical reasons TV programs from the Federal Republic of Germany could not be received in all parts of the German Democratic Republic. Therefore a natural variation occurred in exposure to West German television. We find robust evidence that watching TV is positively correlated with aspirations. Our identification strategy implies a causal relationship running from TV to aspirations. This conclusion resists various sets of alternative specifications and samples.

► We analyze the causal effect of TV consumption on material aspirations. ► We exploit a natural experiment that took place in the German Democratic Republic. ► Owing to geographical reasons a natural variation occurred in exposure to Western TV. ► We identify a causal link and show that watching TV increases material aspirations.