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

30 Pages Posted: 2 May 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

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Abstract

We analyse behaviour and motivations of a sample of about 1,000 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 of 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.

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. The World Economy, Vol. 30, No. 5, pp. 807-836, May 2007, Available at SSRN: https://ssrn.com/abstract=981619 or http://dx.doi.org/10.1111/j.1467-9701.2007.01012.x

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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