Academic journal article The Journal of Consumer Affairs

Do Consumers Care about Ethics? Willingness to Pay for Fair-Trade Coffee

Academic journal article The Journal of Consumer Affairs

Do Consumers Care about Ethics? Willingness to Pay for Fair-Trade Coffee

Article excerpt

Consumers' buying behavior is not consistent with their positive attitude toward ethical products. In a survey of 808 Belgian respondents, the actual willingness to pay for fair-trade coffee was measured. It was found that the average price premium that the consumers were willing to pay for a fair-trade label was 10%. Ten percent of the sample was prepared to pay the current price premium of 27% in Belgium. Fair-trade lovers (11%) were more idealistic, aged between 31 and 44 years and less "conventional." Fair-trade likers (40%) were more idealistic but sociodemographicaily not significantly different from the average consumer.


The purpose of this study was to investigate to what extent consumers were willing to pay for the fair-trade attribute when buying coffee, and how consumers differed in terms of their willingness to pay. First, we will describe fair trade within the context of ethical consumer behavior. Subsequently, the research questions used in our study will be examined.

Consumers can express their concern about the ethical behavior of companies by means of ethical buying and consumer behavior. In general, the ethical

consumer feels responsible toward society and expresses these feelings by means of his or her purchasing behavior. Doane (2001) defined ethical consumption as the purchase of a product that concerns a certain ethical issue (human rights, labor conditions, animal well-being, environment, etc.) and is chosen freely by an individual consumer. There are several dimensions of ethical consumer behavior. Some forms of ethical consumption benefit the natural environment (e.g., environmentally friendly products, legally logged wood, animal well-being), while others benefit people (e.g., products free from child labor, fair-trade products). Cutting across this distinction, ethical consumption may benefit people or the environment close to home (e.g., some types of green products or organic food), or conversely in a faraway part of the world (e.g., fair-trade products or legally logged wood). Consumers can translate their ethical concerns by means of buying products for their positive qualities (e.g., green products) or by boycotting products for their negative qualities (e.g., not buying products made by children). Boycott campaigns against Nike because of alleged labor abuses and Nestle because of the infant formula issue are among the most-cited examples of the latter (Auger, Devinney, and Louviere 2000; Carrigan and Attalla 2001; Creyer 1997; Shaw and Clarke 1999; Strong 1996). Consumers can decide to consider one or more ethical attributes when buying products.

Is ethical consumption growing? Evidence of a growing market for ethical products is often inferred from the results of opinion polls. According to a study by Hines and Ames (2000), 51% of the population had the feeling of being able to make a difference to a company's behavior and 68% claimed to have bought a product or a service because of a company's responsible reputation. On average, 46% of European consumers also claimed to be willing to pay substantially more for ethical products (MORI 2000). However, there are differences as to the reported willingness to pay a price premium for different types of ethical products. For instance, American consumers agreed with a price increase of 6.6% for green products (The Roper Organization, Inc. 1990), while French consumers wanted to pay 10%-25% more for apparel not made by children (CRC-Consommation 1998). With these studies in mind, one could expect a high demand for ethical products. However, the opposite seems to be the case. Most of the ethical labeling initiatives with respect to, for instance, organic food, products free from child labor, legally logged wood, and fair-trade products, often have market shares of less than 1% (MacGillivray 2000).

One of the main reasons for this discrepancy is the attitude-behavior gap. On the one hand, consumer perceptions and attitudes clearly influence behavior, as conceptualized and tested in several models of ethical consumption behavior (Ferrell and Gresham 1985; Hunt and Vitell 1993; Shaw and Clarke 1999; Vitell, Singhapakdi, and Thomas 2001). …

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