Social Media and Consumers - Countervailing Power: The Cottage Cheese Boycott

About this event

In the summer of 2011 a consumer boycott on cottage cheese was organized in Israel via Facebook. The boycott was prompted by the steep increase in prices after price controls were lifted in 2006. We document the evolution of cottage cheese prices and quantities before and after the boycott. The boycott was successful as prices immediately declined and stayed low until the end of the sample period (April 2012) and beyond. We …find that price elasticities,in particular cross price elasticities, substantially increased following the boycott. Moreover,the boycott had a more negative impact on demand and own price elasticities increased more in areas where the use of social media is likely to be high, suggesting the importance of social media in facilitating consumer mobilization. Increased price elasticities, however, cannot fully explain the observed price decline. Firms to have lowered prices to avoid further boycott spread to other products and concerns about government intervention.