Advanced Search
MyIDEAS: Login to save this paper or follow this series

Consumers’ Reactions To Negative Information On Product Quality: Evidence From Scanner Data

Contents:

Author Info

  • Maria De Paola

    ()

  • Vincenzo Scoppa

    ()
    (Dipartimento di Economia e Statistica, Università della Calabria)

Abstract

We analyze consumers’ reactions to negative information on product quality using daily scanner data at item level from a well-known supermarket chain. We focus on a fraud that in 2008 has involved a number of Italian leading firms in the cheese sector. Exploiting the fact that only some brands were mentioned by the media as being involved in the fraud, we adopt a difference-in-differences estimation strategy and evaluate the effects of the negative media coverage comparing changes in sales for involved and for not involved brands. It emerges that the negative news on product quality have induced consumers to shift their demand from involved to not involved brands. These effects persist overtime, also once the media was no more giving attention to the issue. Retailers have suffered part of the costs deriving from the diffusion of bad news on product quality: the margin gained on brands directly mentioned by media has decreased after the negative publicity.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.ecostat.unical.it/RePEc/WorkingPapers/WP12_2010.pdf
File Function: First version, 2010-05
Download Restriction: no

Bibliographic Info

Paper provided by Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica) in its series Working Papers with number 201012.

as in new window
Length: 17 pages
Date of creation: May 2010
Date of revision:
Handle: RePEc:clb:wpaper:201012

Contact details of provider:
Postal: Università della Calabria, Dipartimento di Economia, Statistica e Finanza, Ponte Pietro Bucci, Cubo 0/C, I-87036 Arcavacata di Rende, CS, Italy
Phone: +39 0984 492413
Fax: +39 0984 492421
Web page: http://www.unical.it/portale/strutture/dipartimenti_240/disesf/
More information through EDIRC

Related research

Keywords: Consumer Behavior; Product Quality; Firm Reputation; Scanner Data;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Winand Emons, 1995. "Credence Goods Monopolists," Diskussionsschriften dp9501, Universitaet Bern, Departement Volkswirtschaft.
  2. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 249-275, February.
  3. Askitas, Nikos & Zimmermann, Klaus F., 2009. "Google Econometrics and Unemployment Forecasting," IZA Discussion Papers 4201, Institute for the Study of Labor (IZA).
  4. Timothy J. Feddersen & Thomas W. Gilligan, 2001. "Saints and Markets: Activists and the Supply of Credence Goods," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(1), pages 149-171, 03.
  5. Francesco D’Amuri & Juri Marcucci, 2010. "“Google it!”Forecasting the US Unemployment Rate with a Google Job Search index," Working Papers 2010.31, Fondazione Eni Enrico Mattei.
  6. Burton, Michael & Dorsett, Richard & Young, Trevor, 1996. "Changing Preferences for Meat: Evidence from UK Household Data, 1973-93," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 23(3), pages 357-70.
  7. repec:ese:iserwp:2009-32 is not listed on IDEAS
  8. Viscusi, W Kip & Hersch, Joni, 1990. "The Market Response to Product Safety Litigation," Journal of Regulatory Economics, Springer, vol. 2(3), pages 215-30, September.
  9. Stefano DellaVigna, 2009. "Psychology and Economics: Evidence from the Field," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 315-72, June.
  10. Gregg A. Jarrell & Sam Peltzman, 1984. "The Impact of Product Recalls on the Wealth of Sellers," University of Chicago - George G. Stigler Center for Study of Economy and State 33, Chicago - Center for Study of Economy and State.
  11. Shimshack, Jay P. & Ward, Michael B. & Beatty, Timothy K.M., 2007. "Mercury advisories: Information, education, and fish consumption," Journal of Environmental Economics and Management, Elsevier, vol. 53(2), pages 158-179, March.
  12. Wolfram Schlenker & Sofia B. Villas-Boas, 2009. "Consumer and Market Responses to Mad Cow Disease," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1140-1152.
  13. Borenstein, Severin & Zimmerman, Martin B, 1988. "Market Incentives for Safe Commercial Airline Operation," American Economic Review, American Economic Association, vol. 78(5), pages 913-35, December.
  14. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-41, August.
  15. Takaoka, Sumiko, 2004. "Verdicts and the value of the firm in Japan," Economics Letters, Elsevier, vol. 84(1), pages 93-97, July.
  16. Stefano DellaVigna & Matthew Gentzkow, 2010. "Persuasion: Empirical Evidence," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 643-669, 09.
  17. Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-54, July/Aug..
  18. Judith A. Chevalier & Anil K. Kashyap & Peter E. Rossi, 2000. "Why Don't Prices Rise During Periods of Peak Demand? Evidence from Scanner Data," NBER Working Papers 7981, National Bureau of Economic Research, Inc.
  19. Roger A. Dahlgran & Dean G. Fairchild, 2002. "The demand impacts of chicken contamination publicity-a case study," Agribusiness, John Wiley & Sons, Ltd., vol. 18(4), pages 459-474.
  20. David W. Prince & Paul H. Rubin, 2002. "The Effects of Product Liability Litigation on the Value of Firms," American Law and Economics Review, Oxford University Press, vol. 4(1), pages 44-87, January.
  21. Carl Shapiro, 1983. "Optimal Pricing of Experience Goods," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 497-507, Autumn.
  22. Chalk, Andrew J, 1987. "Market Forces and Commercial Aircraft Safety," Journal of Industrial Economics, Wiley Blackwell, vol. 36(1), pages 61-81, September.
  23. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Sergio Beraldo & Stefania Ottone & Gilberto Turati, 2011. ""Are genetically modified foods bad for my health?". Individuals' valutation and the choice among different information sources," ICER Working Papers 05-2011, ICER - International Centre for Economic Research.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:clb:wpaper:201012. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Giovanni Dodero).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.