The authors show Israelis used social media to protest against cheese companies that had raised prices exponentially:
It is well-documented that social media is an enabler of mass protests. Social media-led protests and how they interact with the economy are, however, less well-understood. This column focusses on boycotts of cottage cheese (a staple food) in Israel as a protest against increased prices and finds that firms seem to react to these threats and set prices not only on the basis of demand elasticities, as traditional analysis in industrial organisation assumes, but also on the basis of the business environment – something which is not easily captured by traditional analysis.
Hendel, Lach, and Spiegel (2015) study another example: the consumer boycott on cottage cheese organised in Israel on Facebook during the summer of 2011. Cottage cheese is a staple food in Israel and is produced exclusively by three of the four largest food suppliers in the country (that is, there are no imports of cottage cheese). Until 2006, the price of cottage cheese was regulated. After deregulation, the price rose sharply and by the summer of 2011, it reached 7 NIS ($1.82) per container on average, about 43% higher than in 2006. Although food prices in general increased during that period, cottage cheese became a symbol for the price hikes. Following extensive news coverage of these high prices, a Facebook event was created on 14 June 2011, calling for a boycott on cottage cheese unless its price drops to 5 NIS ($1.30). The event received wide coverage in the traditional media and within two weeks it was joined by more than 105,000 Facebook users.
The events that unfolded are documented and analysed in Hendel et al. (2015) using daily store level data on revenues and quantities from all supermarkets and most grocery stores in Israel from January 2010 until the end of April 2012.
The data show that the boycott had an immediate effect on prices: several supermarket chains started offering cottage cheese and other dairy products at special promotional prices. As Figure 1 shows, the average price of cottage cheese dropped virtually overnight by 24% to about 5.5 NIS ($1.43) per container. The price remained at the new level until the end of our sample period (April 2012) and, even today it is under 6 NIS ($1.56) in most stores.
Hmm. Really effective usage of social media for a worthy cause..