We study a consumer boycott on cottage cheese, organized in Israel on Facebook in the summer of 2011 following a steep price increase since 2006. The boycott led to an immediate decline in prices, which remain low even six years later. We find that (i) demand at the start of the boycott would have been 30% higher but for the boycott, (ii) own- 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 were concerned with public backlash due to high prices.
ASJC Scopus subject areas
- Economics and Econometrics