Global Social Preferences and the Demand for Socially Responsible Products: Empirical Evidence from a Pilot Study on Fair Trade Consumers

34 Pages Posted: 13 Feb 2007

See all articles by Leonardo Becchetti

Leonardo Becchetti

University of Rome Tor Vergata - Faculty of Economics

Furio C. Rosati

University of Rome Tor Vergata - Faculty of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: February 2007

Abstract

We analyze behaviour and motivations of a sample of about one thousand consumers purchasing fair trade (FT) goods, i. e. food and artisan goods which include socially responsible (SR) characteristics and a price premium for primary product producers with respect to equivalent non FT products. By estimating a simultaneous two-equation treatment effect model we find that FT products have less than unit income elasticity and their demand is negatively (positively) correlated with geographical distance from the nearest shop (age and awareness of SR criteria). Awareness of SR criteria depends, in turn, on a series of factors (consumption habits, membership of volunteer associations) which, indirectly (via increased awareness), significantly affect consumption.

We also measure consumers' willingness to pay in excess for the SR features of FT products with a contingent evaluation approach and find that it is positively correlated with awareness of SR criteria.

Keywords: fair trade, social preferences, willingness to pay

JEL Classification: D109, F14, H23

Suggested Citation

Becchetti, Leonardo and Rosati, Furio C., Global Social Preferences and the Demand for Socially Responsible Products: Empirical Evidence from a Pilot Study on Fair Trade Consumers (February 2007). CEIS Working Paper No. 91, Available at SSRN: https://ssrn.com/abstract=962488 or http://dx.doi.org/10.2139/ssrn.962488

Leonardo Becchetti (Contact Author)

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia, 2
I-00133 Rome
Italy

Furio C. Rosati

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia n.2
Rome, rome 00100
Italy
6 2020 500 (Fax)

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