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Global social preferences and the demand for socially responsible products: empirical evidence from a pilot study on fair trade consumers

Author

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  • Leonardo Becchetti

    (University of Rome Tor Vergata)

  • Furio Rosati

    (University of Rome Tor Vergata)

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.

Suggested Citation

  • Leonardo Becchetti & Furio Rosati, 2007. "Global social preferences and the demand for socially responsible products: empirical evidence from a pilot study on fair trade consumers," CEIS Research Paper 90, Tor Vergata University, CEIS.
    • Handle: RePEc:rtv:ceisrp:90
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    Cited by:

    1. Borgers, A.C.T., 2014. "Responsible investing : New insights into performance and tastes," Other publications TiSEM 587e777f-c242-4a44-968e-7, Tilburg University, School of Economics and Management.
    2. Gaëlle BALINEAU, 2017. "Fair Trade? Yes, but not at Christmas! Evidence from scanner data on real French Fairtrade purchases," Working Paper ab9a0fd1-6ad5-441b-879b-3, Agence française de développement.
    3. Veronika Andorfer & Ulf Liebe, 2012. "Research on Fair Trade Consumption—A Review," Journal of Business Ethics, Springer, vol. 106(4), pages 415-435, April.
    4. Hayes, M.G., 2008. ""Fighting the Tide: Alternative Trade Organizations in the Era of Global Free Trade"--A Comment," World Development, Elsevier, vol. 36(12), pages 2953-2961, December.
    5. De Devitiis, Biagia & D'Alessio, Massimiliano & Maietta, Ornella Wanda, 2008. "A comparative analysis of the purchase motivations of Fair Trade products: the impact of social capital," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44148, European Association of Agricultural Economists.
    6. Florence Lachet-Touya, 2019. "Relevance of potential supply structures in frameworks involving consumer's private information: the case of fair trade," Working Papers hal-02937902, HAL.
    7. Florence TOUYA, 2019. "Relationships and Nature of Contracts in the Distribution Structure for Responsible Trade," Working Papers 2018-2019_10, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Oct 2019.
    8. Becchetti, Leonardo, 2009. "Revisiting the economy by taking into account the different dimensions of well-being," AICCON Working Papers 60-2009, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    9. Balineau, Gaëlle, 2013. "Disentangling the Effects of Fair Trade on the Quality of Malian Cotton," World Development, Elsevier, vol. 44(C), pages 241-255.
    10. Florence Lachet-Touya, 2019. "Relationships and nature of contracts in the distribution structure for responsible trade," Working papers of CATT hal-02937865, HAL.
    11. Leonardo Becchetti & Elena Giachin Ricca & Alessandra Pelloni, 2009. "The 60es turnaround as a test on the causal relationship between sociability and happiness," Econometica Working Papers wp07, Econometica.
    12. Florence Lachet-Touya, 2019. "Relationships and nature of contracts in the distribution structure for responsible trade," Working Papers hal-02937865, HAL.
    13. Florence TOUYA, 2019. "Relevance of Potential Supply Structures in Frameworks involving Consumer's private Information: the Case of Fair Trade," Working Papers 2018-2019_12, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Aug 2019.
    14. Mark Hudson & Ian Hudson & Jason D. Edgerton, 2013. "Political Consumerism in Context: An Experiment on Status and Information in Ethical Consumption Decisions," American Journal of Economics and Sociology, Wiley Blackwell, vol. 72(4), pages 1009-1037, October.
    15. Alexander Kadow, 2011. "The Fair Trade movement:an economic perspective," Working Papers 2011_05, Business School - Economics, University of Glasgow.
    16. A. Beldad & S. Hegner, 2018. "Determinants of Fair Trade Product Purchase Intention of Dutch Consumers According to the Extended Theory of Planned Behaviour," Journal of Consumer Policy, Springer, vol. 41(3), pages 191-210, September.
    17. Paweł Dec & Piotr Masiukiewicz, 2021. "Socially Responsible Financial Products as a Contribution of Financial Institutions to Sustainable Development," Sustainability, MDPI, vol. 13(6), pages 1-10, March.
    18. Florence Lachet-Touya, 2019. "Relevance of potential supply structures in frameworks involving consumer's private information: the case of fair trade," Working papers of CATT hal-02937902, HAL.
    19. Jisong Kim & Chang-Sik Kim & Mina Jo, 2023. "Cross-Country Analysis of Willingness to Pay More for Fair Trade Coffee: Exploring the Moderating Effect between South Korea and Vietnam," Sustainability, MDPI, vol. 15(23), pages 1-22, November.
    20. Kaushik Basu, 2016. "Beyond the Invisible Hand: Groundwork for a New Economics," Economics Books, Princeton University Press, edition 1, number 9299.

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    More about this item

    Keywords

    fair trade; social preferences; willingness to pay.;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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