Reputational risk caused by The Great East Japan Earthquake: A study on consumer factors leading to restrained buying

Abstract

This study investigated why the restrained buying called reputational risk occurred after The Great East Japan Earthquake, focusing on the psychological factors influencing consumers. A preliminary investigation (N=112) identified affective (System 1) factors—“negative affect,” “association with Fukushima,” “support for quake-hit areas,” and “radiation anxieties”—and reason (System 2) factors—“knowledge-based judgment” and “rational decision”—based on the dual-process theory. Initially, the results of structural equation modeling (SEM) conducted on the main survey data (N=310) indicated the influence of multi-collinearity. Accordingly, the factors “negative affect,” “association with Fukushima,” and “radiation anxieties” were integrated as “anxiety over radiation and nuclear power.” The result of SEM on the refined model suggested this factor causes restrained buying while “support for quake-hit areas” is effective in its mitigation. Finally, future contingency plans to combat reputational risk were discussed based on the findings of this study.