Heterogeneous Consumer Reactions to Health News

Abstract

We investigate heterogeneity in how consumers react to health‐related media information. Our specific focus is on news relating to fish and the consumption of different types of fish. We specify a dynamic empirical model that allows for pervasive heterogeneity in all basic parameters of consumer behavior, as well as in how consumers react to information. We estimate the model using a unique household panel tracking consumption, prices, news stories, and media habits over 24 quarters. We find that only 16% of consumers react to news that is specific to fatty fish. These consumers have a large reaction to such news, with a modest initial over‐reaction. Furthermore, these consumers are also more attentive to general media information about the healthiness of fish.

Keywords: Consumer behaviour, health news, pervasive heterogeneity