International immigration and final consumption expenditure composition

Focusing on EU countries, we analyze the influence of immigration flows on the demand for different aggregate categories of final consumption goods. Using the crosscountry heterogeneity in immigration flows and preference structures, we find that when people move from a country to another, the sectoral preferences characterizing the origin country affect the preference structure of the host country. Furthermore, we find evidence that the transmission mechanism is reinforced by both the intensity of the immigration flows and the share of immigrants already living in the host country, suggesting a higher propensity to assimilate different consumption standards in more pluralistic countries. Our contribution is twofold. First, differently from most of the literature that analyzes the supply-side consequences of immigration, this study focuses on the impact of immigration on the demand side at the aggregate level. Second, we show that sectoral consumer preferences, even if elicited only residually, represent aggregate variables that can be transferred across countries.