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Consumers' activism: the cottage cheese boycott

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  • Igal Hendel
  • Saul Lach
  • Yossi Spiegel

Abstract

We study a consumer boycott on cottage cheese that was organized in Israel on Facebook in the summer of 2011 following a steep increase in prices after price controls were lifted in 2006. The boycott led to an immediate decline in prices which remain low until the present day (March 2016). We find that (i) demand at the start of the boycott, at the new low prices, would have been 30% higher but for the boycott, (ii) own price elasticities and especially cross price elasticities increased substantially after the boycott, and (iii) post-boycott prices are substantially below the levels implied by the post-boycott demand elasticities, suggesting that firms lowered prices due to fears of threat of renewed price controls and the boycott spreading to other products.
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Suggested Citation

  • Igal Hendel & Saul Lach & Yossi Spiegel, 2017. "Consumers' activism: the cottage cheese boycott," RAND Journal of Economics, RAND Corporation, vol. 48(4), pages 972-1003, December.
    • Handle: RePEc:bla:randje:v:48:y:2017:i:4:p:972-1003
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    File URL: http://hdl.handle.net/10.1111/rand.2017.48.issue-4
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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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