Buying Green? Field Experimental Tests of Consumer Support for Environmentalism

Abstract

Surveys indicate that a majority of consumers would prefer to buy products made in environmentally sustainable ways, rather than alternatives, and would even be willing to pay a premium for such products. Many firms are now using environmental certifications and product labeling to market goods and services, but there is no clear evidence that environmentalism has a strong impact on actual purchasing decisions by consumers. We provide new evidence on consumer behavior from two large-scale field experiments conducted with Gap Inc. in 419 retail stores and 155 outlet stores. We find that labels with information about a program to reduce water pollution in facilities laundering denim jeans as part of the manufacturing process had a substantial positive effect on sales among female shoppers in retail stores, increasing sales by 8%. Among male shoppers and in outlet stores, however, the labels had no discernable impact on sales.

Keywords: environmentalism, consumer behaviour, field experiments

JEL Classification: D12, C93