Demand for Carbon-Neutral Products

Stefano Carattini, Fabian Dvorak, Ivana Logar and Begum Ozdemir-Oluk

No 20843, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Corporate social responsibility and the private provision of (global) public goods are of key interest to economists and policymakers. Over the last few years, many more private companies made their operations carbon neutral. It is an empirical question how consumers value carbon-neutral and low-carbon products, which we address as follows. First, we provide a meta-analysis of the literature. We analyze consumers’ demand for carbon-neutral and low-carbon products, based on an overall sample of 29,666 participants. The focus is on average willingness to pay for carbon reductions as well as on the characteristics of the underlying literature, which is mainly based on stated preferences and controlled environments. Second, we leverage information on prices and product characteristics from one of the largest online marketplaces, Amazon’s. Using a hedonic approach, we infer from revealed preferences on consumers’ valuation of carbon- neutral products. The staggered process of carbon-neutral certification leads to a series of quasi-natural experiments, which we use for identification purposes. We find that the literature suggests a positive willingness to pay for carbon reductions that exceeds most estimates of the social cost of carbon. However, this finding is not supported by the hedonic analyses, where we do not find evidence that consumers value carbon neutrality.

Keywords: Corporate social responsibility; Pro-social behavior; Stated and revealed preferences; Meta-analysis; Hedonic analysis; Carbon-neutral labels (search for similar items in EconPapers)
JEL-codes: D12 D22 H41 Q51 Q54 (search for similar items in EconPapers)
Date: 2025-11
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