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Global Social Preferences and the Demand for Socially Responsible Products: Empirical Evidence from a Pilot Study on Fair Trade Consumers

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  • Leonardo Becchetti
  • Furio Camillo Rosati

Abstract

We analyse behaviour and motivations of a sample of about 1,000 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 of 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. Copyright 2007 The Authors Journal compilation Blackwell Publishing Ltd. 2007 .

Suggested Citation

  • Leonardo Becchetti & Furio Camillo Rosati, 2007. "Global Social Preferences and the Demand for Socially Responsible Products: Empirical Evidence from a Pilot Study on Fair Trade Consumers," The World Economy, Wiley Blackwell, vol. 30(5), pages 807-836, May.
  • Handle: RePEc:bla:worlde:v:30:y:2007:i:5:p:807-836
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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. 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.
    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. Balineau, Gaëlle, 2013. "Disentangling the Effects of Fair Trade on the Quality of Malian Cotton," World Development, Elsevier, vol. 44(C), pages 241-255.
    5. 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.
    6. 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.
    7. 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.
    8. Kadow, Alexander, 2011. "The Fair Trade movement: an economic perspective," SIRE Discussion Papers 2011-10, Scottish Institute for Research in Economics (SIRE).
    9. 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.

    More about this item

    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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