Social Media, Consumer Behavior, and Information Disclosure: Evidence from a Shock of MERS in South Korea

초록

Korea’s health officials did not disclose the names of hospitals exposed to MERS-CoV for the first three weeks of the outbreak in 2015, and this inappropriate decision amplified fear in the society. Thus, this paper examines the MERS outbreak and its consequential effect on shopping patterns in the retail market, as focusing on the failure of timely information provision. The results show that those living near MERS hospitals reduced their spending at big-box and department stores and particularly decreased further during the early period of the outbreak without information disclosure. This finding suggests that the information uncertainty would raise consumers’ anxiety that forced to change their economic behaviors. Therefore, the improper information withholding is much harmful to the economy and, moreover, the negative impact is not uniform across retailers but depends upon a store’s expected crowdedness which is presumed to be associated with the perceived infection risk.

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