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Will consumers pay a premium for ethical information?

Author

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  • Robert E. Carter

Abstract

Purpose - The purpose of this paper is to identify the factors that may influence a consumer to pay a premium for a product or service communicating ethical information. Design/methodology/approach - A survey was administered to 77 subjects and a conceptual model of five specific inter-related constructs was tested using LISREL. Findings - There is a sequence of events that leads consumers to be willing to pay a premium for a product communicating ethical information. This sequence starts with the need for information which, in turn, leads to socially responsible behavior and social sacrifice and, finally, to the intention to pay a premium. Importantly, this sequence is positively moderated by monetary resources available to spend in the category. Research limitations/implications - To increase generalizability, this study should be replicated among other sample compositions and for additional products and/or services. Practical implications - The research details the multi-step consumer decision-making process that marketers need to understand in order to market a premium priced product that delivers a social benefit. Originality/value - Socially responsible behavior is not sufficient by itself for a consumer to pay a premium for a product communicating ethical information. Rather, socially responsible behavior leads to a willingness to make a sacrifice which then leads to intentions to pay a premium price.

Suggested Citation

  • Robert E. Carter, 2009. "Will consumers pay a premium for ethical information?," Social Responsibility Journal, Emerald Group Publishing, vol. 5(4), pages 464-477, October.
  • Handle: RePEc:eme:srjpps:v:5:y:2009:i:4:p:464-477
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