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Is social responsibility a normal good?

Author

Listed:
  • Björn Bartling
  • Vanessa Valero
  • Roberto A. Weber

Abstract

We investigate whether growth in consumer income causes an increased willingness to pay to mitigate negative externalities from consumption. Correlational field evidence suggests a positive relationship between income and social responsibility. To investigate a causal link, we conduct a laboratory market experiment in which firms and consumers can exchange products that differ in the degree to which they mitigate negative external impacts at the expense of higher production costs. Our treatments exogenously vary consumers’ incomes. Our experimental results reveal that growth in consumer income causes an increase in the share of socially responsible consumption in the laboratory. Such a causal relationship is significant from a policy perspective, as it implies that some negative external impacts of consumption activity can be mitigated as societies experience economic growth.

Suggested Citation

  • Björn Bartling & Vanessa Valero & Roberto A. Weber, 2018. "Is social responsibility a normal good?," ECON - Working Papers 299, Department of Economics - University of Zurich.
  • Handle: RePEc:zur:econwp:299
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    References listed on IDEAS

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    More about this item

    Keywords

    Social responsibility; income growth; normal goods; laboratory experiment; market game;

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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