DP10460 Consumers' Activism: The Cottage Cheese Boycott
|Author(s):||Igal E Hendel, Saul Lach, Yossi Spiegel|
|Publication Date:||March 2015|
|Keyword(s):||consumer boycott, price elasticities, social media|
|Programme Areas:||Industrial Organization|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=10460|
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.