Consumers' Activism: The Facebook Boycott of Cottage Cheese

46 Pages Posted: 2 Mar 2015

See all articles by Igal Hendel

Igal Hendel

Northwestern University - Department of Economics; National Bureau of Economic Research (NBER)

Saul Lach

Hebrew University of Jerusalem - Department of Economics; CEPR

Yossi Spiegel

Tel Aviv University, Coller School of Management; Centre for Economic Policy Research (CEPR); ZEW – Leibniz Centre for European Economic Research

Date Written: March 2015

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.

Keywords: consumer boycott, price elasticities, social media

JEL Classification: D12, L1

Suggested Citation

Hendel, Igal E. and Lach, Saul and Spiegel, Yossi, Consumers' Activism: The Facebook Boycott of Cottage Cheese (March 2015). CEPR Discussion Paper No. DP10460. Available at SSRN: https://ssrn.com/abstract=2572458

Igal E. Hendel (Contact Author)

Northwestern University - Department of Economics ( email )

2003 Sheridan Road
Evanston, IL 60208
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Saul Lach

Hebrew University of Jerusalem - Department of Economics ( email )

Mount Scopus
Jerusalem, 91905
Israel
+972 2 588 3253 (Phone)
+972 2 581 6071 (Fax)

HOME PAGE: http://economics.huji.ac.il/facultye/saul/saul.html

CEPR

London
United Kingdom

Yossi Spiegel

Tel Aviv University, Coller School of Management ( email )

Ramat Aviv, Tel Aviv, 69978
Israel
972-3-640-9063 (Phone)
972-3-640-7739 (Fax)

HOME PAGE: http://www.tau.ac.il/~spiegel

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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