Consumer Demand for Fair Trade: Evidence from a Multistore Field Experiment

Jens Hainmueller, Michael J. Hiscox () and Sandra Sequeira
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Michael J. Hiscox: Harvard University

The Review of Economics and Statistics, 2015, vol. 97, issue 2, 242-256

Abstract: We provide new evidence on consumer demand for ethical products from experiments conducted in a U.S. grocery store chain. We find that sales of the two most popular coffees rose by almost 10% when they carried a Fair Trade label as compared to a generic placebo label. Demand for the higher-priced coffee remained steady when its price was raised by 8%, but demand for the lower-priced coffee was elastic: a 9% price increase led to a 30% decline in sales. While consumers attach value to ethical sourcing, there is significant heterogeneity in willingness to pay for it. © 2015 The President and Fellows of Harvard College and the Massachusetts Institute of Technology

Keywords: comsumer demand; ethical products; Fair Trade; coffee; ethical sourcing; heterogeneity (search for similar items in EconPapers)
JEL-codes: G00 Q00 Q02 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (114)

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