U.S. consumer boycott of French-sounding products during 2003 Iraq War
Pandya and Venkatesan turned to online surveys. “We asked people what country they associated with each of the brands in our sample and each brand got coded by seven people,” Pandya said. “We gave them the name of the brand, written in text but preserving any special characters like accent marks, and we told them what the product category was, be it beer or shampoo.”
Most of the brands shoppers think are French are actually not. Approximately 10 percent of the sample, 850 products, was rated as “highly French.” By comparison, France-based companies owned only 50 brands, and only 27 brands were French-owned U.S. trademarks.
For Pandya and Venkatesan’s purposes, this divergence was a gold mine. It allowed them to cleanly measure how national identity influences economic behavior. For most of these brands, the dispute’s only effect was to sour Americans’ attitudes towards France. Sales of objectively French brands could reflect unrelated effects of the dispute on French brands, such as higher shipping costs for goods imported from France.
According to Pandya, “Measuring the effects of national identity on economic behavior is hard to do. Our national identities correlate with so many other factors that influence our behavior. We had a rare opportunity to show that national identity in and of itself shapes economic decision-making.”
They found that during the U.S.-France dispute, the market share of French-sounding, U.S. supermarket brands declined – think L’Oréal shampoo or Grey Poupon mustard. “At a key juncture in the dispute, the week ending 16 March, brands that consumers most strongly perceived as French saw a 0.4 percent average decline in store market share as compared to the same week in 2002, after controlling for changes in brand price and number of varieties,” they write.
“The boycott translates into a $43 million loss in sales during the week of March 16,” said Venkatesan. “The potentially small 0.4 percent change in share in a single store translates to a substantial loss given the large number of brands and stores nationwide.”
The pair was surprised to make the discovery. “There are so many things that influence these kinds of patterns and we were controlling for everything you can think of: price fluctuations, weekly sales, the number of varieties of a product in a store in a week,” Pandya said. “That we still find an effect is kind of remarkable.”
Additionally, they found that stores with a higher proportion of customers who are U.S. citizens exhibited more pronounced boycotting behavior, a pattern the authors attribute to citizens’ stronger sense of U.S. national identity.
The release notes that the findings will be published in the coming months, but students at U.Va. are already learning from them. This semester, Pandya is teaching an upper-division course in the Woodrow Wilson Department of Politics about political behavior in the context of the global economy, and Venkatesan gave a guest lecture on the role of social media in the Arab Spring. “So we are able to continue the interdisciplinary collaboration on the teaching side as well,” Pandya said.
This research was supported by U.Va.’s Bankard Fund for Political Economy, the Quantitative Collaborative and the Behavioral Research at Darden Lab.
— Read more in Sonal S. Pandya, “French Roast: Consumer Response to International Conflict - Evidence from Supermarket Scanner Data,” Review of Economics and Statistics (accepted for publication; posted online 20 March 2015) (doi:10.1162/REST_a_00526)
