So how much do you pay for ethical consumption? Estimating the hedonic price for Fair Trade coffee in Sweden
AbstractThis study applies the method of hedonic pricing to estimate the impact of the Fair Trade-label on the market for coffee in Sweden. Over the past decades, the general public interest in products bearing some environmental or social responsibility label has grown considerably in the EU, and Sweden is one of the countries where public awareness of labelling issues is particularly high. The sale of labelled products in regular supermarkets has increased significantly in Sweden but despite growing supply and acceptance, a lot remains to be understood about the market. This study takes a revealed preference approach using weekly scanner sales panel data recently made available by Nielsen and the Swedish Retail Institute (HUI). A representative sample of grocery stores all over Sweden is covered, as well as all major brands supplying roasted coffee. Hedonic estimates are obtained for what consumers pay for different characteristics as accessible from the package. Results point to a considerable premium of 38% paid for Fair Trade coffee, underlining high public awareness reflected in the retailers’ pricing policy.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by HUI Research in its series HUI Working Papers with number 31.
Length: 28 pages
Date of creation: 08 Jul 2011
Date of revision:
Contact details of provider:
Postal: HUI Research, Regeringsgatan 60, 103 29 Stockholm, Sweden
Phone: +46 (0)8 762 72 80
Fax: +46 (0)8 679 76 06
Web page: http://www.hui.se/
More information through EDIRC
Fair Trade; coffee; eco-labels; hedonic pricing; ethical consumption;
Find related papers by JEL classification:
- J80 - Labor and Demographic Economics - - Labor Standards - - - General
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- G¸nter Schamel & Kym Anderson, 2003. "Wine Quality and Varietal, Regional and Winery Reputations: Hedonic Prices for Australia and New Zealand," The Economic Record, The Economic Society of Australia, vol. 79(246), pages 357-369, 09.
- Chris Arnot & Peter C. Boxall & Sean B. Cash, 2006.
"Do Ethical Consumers Care About Price? A Revealed Preference Analysis of Fair Trade Coffee Purchases,"
Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie,
Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(4), pages 555-565, December.
- C Arnot & P Boxall & S Cash, 2006. "Do ethical consumers care about price? A revealed preference analysis of fair trade coffee purchases," Natural Field Experiments 00221, The Field Experiments Website.
- Thunström, Linda, 2007. "The Marginal Willingness-to-Pay for Health Related Food Characteristics," HUI Working Papers 12, HUI Research.
- Basu, Arnab K. & Hicks, Robert L., 2008. "Label Performance and the Willingness to Pay for Fair Trade Coffee: A Cross-National Perspective," Discussion Papers 44336, University of Bonn, Center for Development Research (ZEF).
- Galarraga, Ibon & Markandya, Anil, 2004. "Economic techniques to estimate the demand for sustainable products: a case study for fair trade and organic coffee in the United Kingdom," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 4(07).
- repec:feb:natura:0061 is not listed on IDEAS
- Henrik Andersson, 2005. "The Value of Safety as Revealed in the Swedish Car Market: An Application of the Hedonic Pricing Approach," Journal of Risk and Uncertainty, Springer, vol. 30(3), pages 211-239, May.
- Torsten Steinrücken & Sebastian Jaenichen, 2007. "The Fair Trade Idea: Towards an Economics of Social Labels," Journal of Consumer Policy, Springer, vol. 30(3), pages 201-217, September.
- Sanja Lutzeyer, 2008. "Estimating Hedonic Prices for Stellenbosch wine," Working Papers 15/2008, Stellenbosch University, Department of Economics.
- John Wilkinson, 2007. "Fair Trade: Dynamic and Dilemmas of a Market Oriented Global Social Movement," Journal of Consumer Policy, Springer, vol. 30(3), pages 219-239, September.
- William F. Hahn & Kenneth H. Mathews, 2007. "Characteristics and hedonic pricing of differentiated beef demands," Agricultural Economics, International Association of Agricultural Economists, vol. 36(3), pages 377-393, 05.
- Durevall, Dick, 2007. "Demand for coffee in Sweden: The role of prices, preferences and market power," Food Policy, Elsevier, vol. 32(5-6), pages 566-584.
- Marco Costanigro & Jill J. McCluskey & Ron C. Mittelhammer, 2007. "Segmenting the Wine Market Based on Price: Hedonic Regression when Different Prices mean Different Products," Journal of Agricultural Economics, Wiley Blackwell, vol. 58(3), pages 454-466, 09.
- Sarah Lyon, 2007. "Fair Trade Coffee and Human Rights in Guatemala," Journal of Consumer Policy, Springer, vol. 30(3), pages 241-261, September.
- Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
- Thunström, Linda, 2007. "The Marginal Willingness-to-Pay for Health Related Food Characteristics," UmeÃ¥ Economic Studies 724, Umeå University, Department of Economics.
- Loureiro, Maria L. & Lotade, Justus, 2005. "Do fair trade and eco-labels in coffee wake up the consumer conscience?," Ecological Economics, Elsevier, vol. 53(1), pages 129-138, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Helena Nilsson).
If references are entirely missing, you can add them using this form.