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.
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Paper provided by Tor Vergata University, CEIS in its series CEIS Research Paper with number
90.
Length: 34 Date of creation: 20 Feb 2007 Date of revision: Handle: RePEc:rtv:ceisrp:90
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Find related papers by JEL classification: F14 - International Economics - - Trade - - - Country and Industry Studies of Trade H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
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