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

Jens Hainmueller; Michael J. Hiscox; Sandra Sequeira

doi:10.1162/rest_a_00467

← Search

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

Jens Hainmueller¹; Michael J. Hiscox²; Sandra Sequeira³

¹ Stanford University · ² Harvard University Press · ³ London School of Economics and Political Science

The Review of Economics and Statistics 2015

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.

DOI: 10.1162/rest_a_00467
Volume: 97 (2)
Pages: 242-256
Language: en
Export: BibTeX
Sources: crossref openalex