IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/10460.html
   My bibliography  Save this paper

Consumers' Activism: the Facebook boycott of Cottage Cheese

Author

Listed:
  • Hendel, Igal E
  • Lach, Saul
  • Spiegel, Yossi

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 stayed low more than three years after the boycott. 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 elasticities of demand, suggesting that firms lowered prices due to fears of the boycott spreading to other products, of new price controls, and of possibly class action law suits.

Suggested Citation

  • Hendel, Igal E & Lach, Saul & Spiegel, Yossi, 2015. "Consumers' Activism: the Facebook boycott of Cottage Cheese," CEPR Discussion Papers 10460, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:10460
    as

    Download full text from publisher

    File URL: http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=10460
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gavazza, Alessandro & Nardotto, Mattia & Valletti, Tommaso, 2015. "Internet and Politics: Evidence from U.K. Local Elections and Local Government Policies," CEPR Discussion Papers 10991, C.E.P.R. Discussion Papers.
    2. Teoh, Siew Hong & Welch, Ivo & Wazzan, C Paul, 1999. "The Effect of Socially Activist Investment Policies on the Financial Markets: Evidence from the South African Boycott," The Journal of Business, University of Chicago Press, vol. 72(1), pages 35-89, January.
    3. Raymond Fisman & Yasushi Hamao & Yongxiang Wang, 2014. "Nationalism and Economic Exchange: Evidence from Shocks to Sino-Japanese Relations," Review of Financial Studies, Society for Financial Studies, vol. 27(9), pages 2626-2660.
    4. Oliver Falck & Robert Gold & Stephan Heblich, 2014. "E-lections: Voting Behavior and the Internet," American Economic Review, American Economic Association, vol. 104(7), pages 2238-2265, July.
    5. Hong Canhui & Hu Wei-Min & Prieger James E. & Zhu Dongming, 2011. "French Automobiles and the Chinese Boycotts of 2008: Politics Really Does Affect Commerce," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-38, May.
    6. Ashenfelter, Orley & Ciccarella, Stephen & Shatz, Howard J., 2007. "French Wine and the U.S. Boycott of 2003: Does Politics Really Affect Commerce?," Journal of Wine Economics, Cambridge University Press, vol. 2(01), pages 55-74, March.
    7. Jeffrey R. Brown & Austan Goolsbee, 2002. "Does the Internet Make Markets More Competitive? Evidence from the Life Insurance Industry," Journal of Political Economy, University of Chicago Press, vol. 110(3), pages 481-507, June.
    8. Nina Czernich, 2012. "Broadband Internet and Political Participation: Evidence for G ermany," Kyklos, Wiley Blackwell, vol. 65(1), pages 31-52, February.
    9. Daron Acemoglu & Tarek A. Hassan & Ahmed Tahoun, 2014. "The Power of the Street: Evidence from Egypt's Arab Spring," NBER Working Papers 20665, National Bureau of Economic Research, Inc.
    10. Sofronis Clerides & Peter Davis & Antonis Michis, 2015. "National Sentiment and Consumer Choice: The Iraq War and Sales of US Products in Arab Countries," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(3), pages 829-851, July.
    11. Stango, Victor, 2003. "Strategic Responses to Regulatory Threat in the Credit Card Market," Journal of Law and Economics, University of Chicago Press, vol. 46(2), pages 427-452, October.
    12. Larry Chavis & Phillip Leslie, 2009. "Consumer boycotts: The impact of the Iraq war on French wine sales in the U.S," Quantitative Marketing and Economics (QME), Springer, vol. 7(1), pages 37-67, March.
    13. David P. Baron & Daniel Diermeier, 2007. "Strategic Activism and Nonmarket Strategy," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(3), pages 599-634, September.
    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


    Cited by:

    1. Enikolopov, Ruben & Makarin, Alexey & Petrova, Maria, 2016. "Social Media and Protest Participation: Evidence from Russia," CEPR Discussion Papers 11254, C.E.P.R. Discussion Papers.
    2. Cuadras-Morató Xavier & Raya Josep Maria, 2016. "Boycott or Buycott?: Internal Politics and Consumer Choices," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(1), pages 185-218, January.

    More about this item

    Keywords

    consumer boycott; price elasticities; social media;

    JEL classification:

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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:10460. 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: (). General contact details of provider: .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.