Will consumers pay a premium for ethical information?

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.