Are the poor willing to pay a premium for designer labels? a field experiment in Bolivia

Luuk Van Kempen

Oxford Development Studies, 2004, vol. 32, issue 2, 205-224

Abstract: This paper provides an empirical test of whether consumers in developing countries who live under conditions of poverty are prepared to pay a premium for products that feature a designer label, not because these are perceived as being of higher quality but for symbolic reasons. For this purpose a field experiment was conducted among urban, low-income consumers in Bolivia. An incentive-compatible procedure was used to elicit willingness-to-pay for designer brand perfume and an intrinsically equivalent non-branded perfume. After correcting for possible “quality illusion”, we find that poor consumers, as a group, are willing to pay a premium for the designer label as a symbol. This willingness to pay for a designer logo depends on respondents' relative economic situation, education level and the frequency of watching soaps on television.

Date: 2004
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Citations: View citations in EconPapers (15)

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DOI: 10.1080/13600810410001699957

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