Global Social Preferences and the Demand for Socially Responsible Products: Empirical Evidence from a Pilot Study on Fair Trade Consumers

We analyse behaviour and motivations of a sample of about 1,000 consumers purchasing ‘fair trade (FT) goods’, i.e. food and artisan goods which include socially responsible (SR) characteristics and a price premium for primary product producers with respect to equivalent non‐FT products. By estimatin...

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Bibliographic Details
Published in:World economy 2007-05, Vol.30 (5), p.807-836
Main Authors: Becchetti, Leonardo, Rosati, Furio Camillo
Format: Article
Language:English
Subjects:
Consumers
Consumption
Criteria
Discriminant analysis
Elasticity of demand
Fair trade
Habits
Membership
Preferences
Purchasing
Social Responsibility
Studies
Trade
Volunteers
Willingness to pay
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Summary:We analyse behaviour and motivations of a sample of about 1,000 consumers purchasing ‘fair trade (FT) goods’, i.e. food and artisan goods which include socially responsible (SR) characteristics and a price premium for primary product producers with respect to equivalent non‐FT products. By estimating a simultaneous two‐equation treatment effect model we find that FT products have less than unit of income elasticity and their demand is negatively (positively) correlated with geographical distance from the nearest shop (age and awareness of SR criteria). Awareness of SR criteria depends, in turn, on a series of factors (consumption habits, membership of volunteer associations) which, indirectly (via increased awareness), significantly affect consumption. We also measure consumers’ willingness to pay in excess for the SR features of FT products with a contingent evaluation approach and find that it is positively correlated with awareness of SR criteria.
ISSN:0378-5920
1467-9701
DOI:10.1111/j.1467-9701.2007.01012.x