Abstract

http://ssrn.com/abstract=1801942
 
 

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Consumer Demand for the Fair Trade Label: Evidence from a Multi-Store Field Experiment


Jens Hainmueller


Stanford University - Department of Political Science; Stanford Graduate School of Business

Michael J. Hiscox


Harvard University

Sandra Sequeira


London School of Economics

March 2014

Review of Economics and Statistics, Forthcoming
Formerly: MIT Political Science Department Research Paper No. 2011-9B

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.

Number of Pages in PDF File: 59

Keywords: consumer behaviour, field experiments

JEL Classification: C93, D12, D64, M14

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Date posted: April 4, 2011 ; Last revised: March 26, 2014

Suggested Citation

Hainmueller, Jens and Hiscox, Michael J. and Sequeira, Sandra, Consumer Demand for the Fair Trade Label: Evidence from a Multi-Store Field Experiment (March 2014). Review of Economics and Statistics, Forthcoming; Formerly: MIT Political Science Department Research Paper No. 2011-9B. Available at SSRN: http://ssrn.com/abstract=1801942 or http://dx.doi.org/10.2139/ssrn.1801942

Contact Information

Jens Hainmueller (Contact Author)
Stanford University - Department of Political Science ( email )
Stanford, CA 94305
United States
HOME PAGE: http://www.stanford.edu/~jhain/
Stanford Graduate School of Business ( email )
518 Memorial Way
Stanford, CA 94305-5015
United States
Michael J. Hiscox
Harvard University ( email )
1737 Cambridge Street
Cambridge, MA 02138
United States
HOME PAGE: http://www.people.fas.harvard.edu/~hiscox/
Sandra Sequeira
London School of Economics ( email )
Houghton Street
London, WC2A 2AE
United Kingdom
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