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The Importance of the Indirect Transfer Mechanism for Consumer Willingness to Pay for Fair Trade Products—Evidence from a Natural Field Experiment

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Author Info

  • Hannes Koppel

    ()

  • Günther Schulze

    ()

Abstract

A natural field experiment is conducted on the determinants of consumer’s willingness to pay for “fair trade” (FT) products. In four treatments, subjects are offered different choices in connection with a coffee purchase, such as buying regular coffee or FT coffee at a premium, regular coffee with or without a premium, or donating directly or not donating. Depending on the treatment, the premium or direct donations are either given to FT or a well-known charity. A large part of the willingness to pay a premium for FT coffee over regular coffee is shown to be not related to the specific attributes of FT coffee but rather caused by the indirect transfer mechanism that FT uses, i.e., selling products at a premium which goes to the cause of FT. Copyright Springer Science+Business Media New York 2013

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Bibliographic Info

Article provided by Springer in its journal Journal of Consumer Policy.

Volume (Year): 36 (2013)
Issue (Month): 4 (December)
Pages: 369-387

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Handle: RePEc:kap:jcopol:v:36:y:2013:i:4:p:369-387

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Web page: http://www.springerlink.com/link.asp?id=100283

Related research

Keywords: Fair Trade; Donation; Altruism; Transfer Mechanism;

References

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Cited by:
  1. Jana Friedrichsen & Dirk Engelmann, 2013. "Who Cares for Social Image? Interactions between Intrinsic Motivation and Social Image Concerns," CESifo Working Paper Series 4514, CESifo Group Munich.

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