"Why some consumers don't care": Heterogeneity in household responses to a food scandal

In the aftermath of food scandals, household perceptions about the health risks posed by failures in food safety play a central role in determining their mitigating behavior. A stream of literature has shown that factors including media coverage of a scandal, risk perceptions, trust in food safety information, and consumption habits matter. This paper deviates from the standard assumption of a homogeneous response to media information across all households exposed to a food scandal. Instead, we present an innovative multi-method approach to investigate the impacts of household heterogeneity in underlying psychological and behavioral, media usage patterns and consumption habits on poultry demand in the aftermath of the 2011 German dioxin scandal. The analysis employs weekly retail purchase and matching survey data for 6133 households covering pre and post scandal periods. The supplementary survey data elicits household respondent's risk perceptions and risk attitudes, product label and media information behavior. Initial factor and cluster analysis identify household segments based on psychographic and behavioral indicators. We then estimate a correlated random effect Tobit model to account for clustered household responses to quantify the influence of media effects distinguishing between short-term risk mitigation behavior and longer-term habit persistence. Our results confirm significant heterogeneity in household's media-induced risk-mitigation responses to the dioxin scandal across three clusters. However, we find that habit persistence in the form of consumption preferences for the affected products were able to largely compensate for demand-reducing media effects across household clusters. Considering heterogeneity in household's risk mitigation behaviors to food scandals holds implications for policy makers and food industry alike.