Does Stated Purchasing Behavior Predict Actual Behavior?

Abstract

This paper studies the extent to which the stated behavior of a household predicts the same household’s actual shopping choices with respect to products that carry Environmental and Ethical (EE) labels. The analysis uses three years of household panel data on retail coffee purchases in Sweden. A central feature of the data is that households submit a questionnaire annually, indicating whether they try as much as possible to buy EE-labeled products. Consumers are indeed more likely to buy EE-labeled products if they say they do, and less likely to if they say they don’t. However, even the strongest self-declared EE-label consumers primarily purchase conventional coffee. Based on shopping choices in the field, these same consumers would be willing to pay premiums for EE-label coffee that are significantly higher than the implicit price for these labels. The results indicate that the narrow range of organic and Fairtrade coffee is an important explanation for the divergence between stated and actual behavior.

Keywords: Hypothetical bias, stated preferences, revealed preferences, consumer scan panel, eco-labeling

JEL Classification: Q51, M31