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

By Jens Hainmueller, Michael J. Hiscox, Sandra Sequeira. Review of Economics and Statistics, 2015

219 citations recorded by the source corpus.

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.

Subfields: Marketing, Safety Research, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/8c5712520e886aad647218f130a50bc740ab6d6a

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Citations in the corpus

SECure: A Social and Environmental Certificate for AI Systems (2020, background): “Ultimately, having empowered users who better understand the impacts of their purchasing decisions (Hainmueller et al., 2015) can become a powerful lever for galvanizing change in the current practices in the development and deployment of machine learning systems.”
Financing the Response to Climate Change: The Pricing and Ownership of U.S. Green Bonds (2018, unknown): “For example, Hainmueller, Hiscox, and Sequeira (2015) found that demand for the two most popular coffees in a U.S. grocery store chain rose by 3 The available practitioner research is also somewhat mixed.”