Abstract

This report investigates consumer responses to the Takata recall. Despite a large and growing number of safety-related recalls globally, there is little quantitative research on variation in consumers’ compliance decision. Using both administrative data and survey data, we investigate vehicle-related, geographic, demographic, and communication factors in consumers’ responses to Takata recalls in Australia. Consumers’ awareness of the Takata recall and willingness to replace vary across individual characteristic such as age, language spoken and location outside of a capital city. The observed replacement decision varies by the value of the affected vehicle, relative wealth level of the consumer, and postcode-level demographics. Empirical observations are interpreted and discussed alongside recent findings in behavioural economics. Based on empirical observations, this study also attempts to introduce a descriptive behavioural model on consumers’ replacement decisions. From our empirical findings and conclusions from the model, we suggest additional research and interventions to better understand behavioural effects on consumers’ recall compliance decisions. We have also reported a survey experiment on one of the suggested trials: the negative framing of information. These findings can assist suppliers and regulators in developing targeted communication strategies to increase recall effectiveness.

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