Consumer Demand for Fair Trade: New Evidence from a Field Experiment Using eBay Auctions of Fresh Roasted Coffee

48 Pages Posted: 17 Apr 2011

See all articles by Michael J. Hiscox

Michael J. Hiscox

Harvard University

Michael Broukhim

Stanford University

Claire Litwin

Harvard University

Date Written: March 16, 2011

Abstract

A majority of surveyed consumers say they prefer ethically certified products, such as Fair Trade coffee, over non-certified alternatives, and are willing to pay a price premium for such products. There is no clear evidence, however, that people seek out such products and pay a premium for them when shopping. We provide new evidence on consumer behavior from an experiment conducted on eBay. We find that the Fair Trade label has a substantial positive effect on bidding for coffee. On average, shoppers paid a 23% premium for coffee labeled Fair Trade. This premium was not affected by the recent recession.

Suggested Citation

Hiscox, Michael J. and Broukhim, Michael and Litwin, Claire, Consumer Demand for Fair Trade: New Evidence from a Field Experiment Using eBay Auctions of Fresh Roasted Coffee (March 16, 2011). Available at SSRN: https://ssrn.com/abstract=1811783 or http://dx.doi.org/10.2139/ssrn.1811783

Michael J. Hiscox (Contact Author)

Harvard University ( email )

1737 Cambridge Street
Cambridge, MA 02138
United States

HOME PAGE: http://www.people.fas.harvard.edu/~hiscox/

Michael Broukhim

Stanford University ( email )

Stanford, CA 94305
United States

Claire Litwin

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

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