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Does political conflict with another country influence domestic consumers' daily consumption choices? We exploit the volatile US-China relations in 2018 and 2019 to analyze whether US consumers reduce their visits to Chinese restaurants when bilateral relations deteriorate. We measure the degree of political conflict through negativity in media reports and rely on smartphone location data to measure daily visits to over 190,000 US restaurants. A deterioration in US-China relations induces a significant decline in visits not only to Chinese but also to other foreign ethnic restaurants, while visits to typical American restaurants increase. We identify consumers' age, race, and cultural openness to moderate the strength of this ethnocentric effect.
Firms, researchers, and policy makers often want to measure consumption and especially how events, promotions, or policies affect it. Measuring consumption reactions is often hard. Firms lack access to competitors’ sales data and regularly do not share their own with outsiders. Large samples of smartphone location data could solve this problem. This article describes a research project using smartphone location data to estimate consumption reactions to political conflict during the Trump presidency.