DP8041 | The Impact of the Iraq War on US Consumer Goods Sales in Arab Countries

Publication Date

23/10/2010

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Abstract

Did the rise in anti-American sentiment caused by the Iraq war a ffect sales of US goods abroad? We address this question using data on soft drink and fabric detergent sales in nine Arab countries. We find a statistically significant negative impact of the war on sales of US soft drinks in seven countries. The impact dissipates after a few months in two countries but persists in the other five. In the case of detergents we only find a significant negative impact in one country. We conclude that international politics can sometimes affect consumer behavior and impact market outcomes.