How environmental accidents influence consumer “green” behavior: An econometric analysis

Abstract

AbstractEnvironmental accidents (EAs) are firm operational failures that harm human health, the natural environment, and offending firms. We propose they also initiate a subtle form of activism among consumers living near the accident by stimulating increased “green” behavior. Using annual county‐level data in California from 2000 to 2015, we show that following an EA, consumers reduce the trash/garbage they generate and the energy they consume. The impact is long‐lasting and stronger when EAs are more severe and when consumers have pro‐environmental beliefs, ready access to information, and convenient access to “green” options, such as recycling. Since affected consumers may also refuse to buy from, invest in, or work for offending companies, the results suggest that firms should develop environmental strategies, which include engaging and collaborating with local communities. The study results also provide input for the development of initiatives, which maximize consumer “green” behavior after, or in the absence of, an EA.