Politically Polarized Consumption

Do politicians intentionally and successfully shape voters’ economic behaviors? This paper provides a positive empirical answer to this question in the context of Donald Trump’s political rallies in 2015-2020, using scanner data from stores across the U.S. We find that Trump’s rallies bring a significant advantage to products made in America in comparison with those made in foreign countries, especially from Mexico and China. Within a distance of 100 miles and up to 7 weeks after a rally, this post-rally effect on made-in-America sales amounts to 2%-3%. It varies greatly by the shares of Republican and Democrat voters, thus creates a polarizing effect across America. It is further strengthened when rally speeches target more specifically China and Mexico.