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

Abstract

Non-separable intertemporal preferences and “novelty consumption” can explain the persistentcorrelation between economic development and obesity. Employing the German reunification as afast motion natural experiment of economic development, we study how the sudden availability ofnovel food products impacts individual consumption patterns and body weight. Immediately afterthe reunification, East Germans consumed more novel western food and gained more weight thanWest Germans. The following long-run persistence of food consumption and body weight patternsamong Eastern Germans cannot be explained by taste for variety, and it provides evidence for habitformation in intertemporal consumption preferences.