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Consumer demand for Fair Trade: evidence from a multistore field experiment

Hainmueller, Jens, Hiscox, Michael J. and Sequeira, Sandra (2015) Consumer demand for Fair Trade: evidence from a multistore field experiment. Review of Economics and Statistics, 97 (2). pp. 242-256. ISSN 0034-6535

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Identification Number: 10.1162/REST_a_00467

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

Item Type: Article
Official URL: https://www.mitpressjournals.org/
Additional Information: © 2015 The President and Fellows of Harvard College and the Massachusetts Institute of Technology
Divisions: International Development
Subjects: H Social Sciences > HF Commerce
Sets: Departments > International Development
Date Deposited: 31 May 2018 16:35
Last Modified: 20 Mar 2019 02:49
URI: http://eprints.lse.ac.uk/id/eprint/88145

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