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Households' Willingness to Pay for "Green" Goods: Evidence from Patagonia's Introduction of Organic Cotton Sportswear

Author

Listed:
  • Ramon Casadesus-Masanell
  • Michael Crooke
  • Forest Reinhardt
  • Vishal Vasishth

Abstract

"To shed light on individuals' willingness to pay for "green" goods (i.e., goods that are supposed to have lower adverse environmental impacts either in production or in use), we study data from the introduction by Patagonia, Inc., of organic cotton sportswear in the mid-1990s. Patagonia, a maker of high-end outdoor wear, substituted organic cotton for conventionally grown cotton in all of its sportswear (i.e., casual clothing for travel and leisure) in 1996. We find that customers were willing to pay significant premiums for organic cotton garments although the organic cotton provided no demonstrable private incremental benefits to the customer." Copyright (c) 2009, The Author(s) Journal Compilation (c) 2009 Wiley Periodicals, Inc..

Suggested Citation

  • Ramon Casadesus-Masanell & Michael Crooke & Forest Reinhardt & Vishal Vasishth, 2009. "Households' Willingness to Pay for "Green" Goods: Evidence from Patagonia's Introduction of Organic Cotton Sportswear," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(1), pages 203-233, March.
  • Handle: RePEc:bla:jemstr:v:18:y:2009:i:1:p:203-233
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    Cited by:

    1. Baron David P & Agus Harjoto Maretno & Jo Hoje, 2011. "The Economics and Politics of Corporate Social Performance," Business and Politics, De Gruyter, vol. 13(2), pages 1-48, August.
    2. Paul Pecorino, 2015. "Olson’s Logic of Collective Action at fifty," Public Choice, Springer, vol. 162(3), pages 243-262, March.
    3. Sabyasachi Das, 2016. "Certification Under Oligopolistic Competition," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 251-271, September.
    4. Friedrichsen, Jana, 2013. "Image concerns and the provision of quality," Discussion Papers, Research Unit: Market Behavior SP II 2013-211, Social Science Research Center Berlin (WZB).
    5. repec:kap:jbuset:v:144:y:2017:i:1:d:10.1007_s10551-015-2796-9 is not listed on IDEAS
    6. Douadia Bougherara & Carole Ropars-Collet & Jude Saint-Gilles, 2018. "Impact of private labels and information campaigns on organic and fair trade food demand," CEE-M Working Papers 18-09, CEE-M, Universitiy of Montpellier, CNRS, INRA, Montpellier SupAgro.
    7. Tonin, Mirco & Vlassopoulos, Michael, 2012. "Social Incentives Matter: Evidence from an Online Real Effort Experiment," AICCON Working Papers 112-2012, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    8. Sengupta, Aditi, 2012. "Investment in cleaner technology and signaling distortions in a market with green consumers," Journal of Environmental Economics and Management, Elsevier, vol. 64(3), pages 468-480.
    9. Maretno Harjoto & Hoje Jo, 2015. "Legal vs. Normative CSR: Differential Impact on Analyst Dispersion, Stock Return Volatility, Cost of Capital, and Firm Value," Journal of Business Ethics, Springer, vol. 128(1), pages 1-20, April.
    10. Vasileiou, Efi & Georgantzís, Nikolaos, 2015. "An experiment on energy-saving competition with socially responsible consumers: Opening the black box," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 58(C), pages 1-10.
    11. Hagmann, Carmen & Semeijn, Janjaap & Vellenga, David B., 2015. "Exploring the green image of airlines: Passenger perceptions and airline choice," Journal of Air Transport Management, Elsevier, vol. 43(C), pages 37-45.
    12. repec:gam:jsusta:v:9:y:2017:i:7:p:1136-:d:103275 is not listed on IDEAS
    13. Xiaoyang Li & Yue Maggie Zhou, 2016. "Offshoring Pollution While Offshoring Production," Working Papers 16-09r, Center for Economic Studies, U.S. Census Bureau.
    14. Bryan Hong & Zhichuan Li & Dylan Minor, 2016. "Corporate Governance and Executive Compensation for Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 136(1), pages 199-213, June.
    15. Mirco Tonin & Michael Vlassopoulos, 2015. "Corporate Philanthropy and Productivity: Evidence from an Online Real Effort Experiment," Management Science, INFORMS, vol. 61(8), pages 1795-1811, August.
    16. Achabou, Mohamed Akli & Dekhili, Sihem, 2013. "Luxury and sustainable development: Is there a match?," Journal of Business Research, Elsevier, vol. 66(10), pages 1896-1903.
    17. repec:eee:jouret:v:90:y:2014:i:2:p:255-274 is not listed on IDEAS
    18. repec:bla:stratm:v:38:y:2017:i:1:p:114-140 is not listed on IDEAS
    19. Bryan Hong & Dylan Minor, 2015. "Choosing To Be "Good": How Managers Determine Their Impact on Financial and Social Performance," Harvard Business School Working Papers 16-011, Harvard Business School.
    20. Aditi Sengupta, 2016. "Green Premium, Ecolabel, and Environmental Damage," Auburn Economics Working Paper Series auwp2016-16, Department of Economics, Auburn University.
    21. Friedrichsen, Jana, 2016. "Signals sell: Designing a product line when consumers have social image concerns," Discussion Papers, Research Unit: Market Behavior SP II 2016-202, Social Science Research Center Berlin (WZB).

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