Understanding ethical consumers: willingness-to-pay by moral cause

Abstract

Purpose

Moral issues such as environmental degradation and workers’ rights are no longer relegated to the political realm; today, they permeate the marketing of consumer products. Some consumer studies focus on organics, others on green goods and still others on fair trade products, but none include the full range of ethical consumption. This study, aims to investigate consumer willingness to pay for five distinct ethical narratives.

Design/methodology/approach

Using original data from a national sample, this paper parses out five types of ethical narratives: fair trade, sustainable/green, American-made and two types of charitable partnerships. Using random assignment and an experimental design allows in isolating the effects of gender, age, education, income, political orientation and political involvement on how much consumers are willing to pay for each type of ethical product.

Findings

This survey experiment demonstrates that the fair trade narrative is the most valuable to consumers, followed by the charitable narratives. The two charitable narratives are universally appealing, whereas fair trade, green and American-made products appeal to three distinct groups of consumers. This paper demonstrates that there is not one sort of ethical shopper, but many.

Practical/implications

This study examines what sorts of stories appeal to particular demographics. It will help socially and environmentally responsible companies better understand their target demographic and how to motivate their target audience.

Originality/value

Previous research yields conflicting findings about who values ethical products because each study focuses on a different form of ethical consumption. This study uses original data to investigate consumers’ valuations of five different types of ethical narratives. The results help in making sense of divergent findings in the literature and expand understanding of socially conscious shoppers.

Full text

Journal of Consumer Marketing
Understanding ethical consumers: willingness-to-pay by moral cause
Kendall Cox Park,
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Understanding ethical consumers: willingness-
to-pay by moral cause
Kendall Cox Park
Department of Sociology, Princeton University, Princeton, New Jersey, USA
Abstract
Purpose –Moral issues such as environmental degradation and workers’rights are no longer relegated to the political realm; today, they permeate
the marketing of consumer products. Some consumer studies focus on organics, others on green goods and still others on fair trade products, but
none include the full range of ethical consumption. This study, aims to investigate consumer willingness to pay for five distinct ethical narratives.
Design/methodology/approach –Using original data from a national sample, this paper parses out five types of ethical narratives: fair trade,
sustainable/green, American-made and two types of charitable partnerships. Using random assignment and an experimental design allows in
isolating the effects of gender, age, education, income, political orientation and political involvement on how much consumers are willing to pay for
each type of ethical product.
Findings –This survey experiment demonstrates that the fair trade narrative is the most valuable to consumers, followed by the charitable
narratives. The two charitable narratives are universally appealing, whereas fair trade, green and American-made products appeal to three distinct
groups of consumers. This paper demonstrates that there is not one sort of ethical shopper, but many.
Practical/implications –This study examines what sorts of stories appeal to particular demographics. It will help socially and environmentally
responsible companies better understand their target demographic and how to motivate their target audience.
Originality/value –Previous research yields conflicting findings about who values ethical products because each study focuses on a different form
of ethical consumption. This study uses original data to investigate consumers’valuations of five different types of ethical narratives. The results
help in making sense of divergent findings in the literature and expand understanding of socially conscious shoppers.
Keywords Experimental design, Social responsibility, Sustainable consumption, Quantitative methods, Behavioral sciences,
Cause-related marketing
Paper type Research paper
Introduction
The popularity of fair-trade foods, eco-friendly products and
buy-one-give-one (BOGO) apparel indicates that people are
willing to spend more for a good cause (Anderson and Hansen,
2004;Kimeldorf et al., 2006;Hudson et al.,2013). This study
investigates economic behavior with social implications, where
social justice and environmentalism impart value to consumer
goods. I report the results of a survey experiment
demonstrating that people are willing to pay more for a cause.
But the relationship between individual characteristics and
willingness to pay is anything but straightforward. Previous
research yields conflicting findings about who values ethical
products because each study focuses on a different market
niche (Hudson et al.,2013;Taylor and Boasson 2014;Elliott,
2013;Ross et al., 1992;Moosmayer and Fuljahn 2010;Pedrini
and Ferri 2014;Youn and Kim 2008).
While these studies have narrowly focused on a single type of
ethical consumption, I parse out fair trade, sustainable/green,
American-made and two types of charitable narratives to show
that ethical consumption is not a single phenomenon. Fair
trade products ensure that producers are paid a living wage.
Green products are made sustainably to prevent environmental
damage. Products that are made in the USA keep business in
the country and combat some of the problems of globalization.
Some ethical goods donate their profits to charity. Still others
follow a BOGO model, where they donate an item for every
product sold. In this study, I ask which narratives encourage
people to buy ethically. And do different people respond to
different stories?
In the following sections, I discuss several fields of
research that apply to my analysis. I first review studies of
fair trade, green goods, American-made products and
charitable partnerships. Then, I present hypotheses about
who values which ethical narratives. First, I expect that the
price people are willing to pay for a product will differ
depending on the narrative (H1).Ialsoexpectthatwomen
will respond more strongly to ethical narratives than men
(H2) and that Democrats (political liberals) will value
ethical goods more than Republicans (political
conservatives; H3). Finally, we might imagine that certain
types of people value ethical goods more highly: younger
(H4), more highly educated (H5), wealthier (H6)andmore
politically and civically engaged (H7-8).
The current issue and full text archive of this journal is available on
Emerald Insight at: www.emeraldinsight.com/0736-3761.htm
Journal of Consumer Marketing
35/2 (2018) 157–168
© Emerald Publishing Limited [ISSN 0736-3761]
[DOI 10.1108/JCM-02-2017-2103]
Received 17 February 2017
Revised 5 May 2017
24 July 2017
Accepted 11 August 2017
157
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This study answers these questions experimentally by
quantifying the values of different ethical narratives. I collect
and analyze original data from a national sample of individuals
in the USA. Subjects were randomized into one of six
experimental conditions and asked to report what they would
pay for a particular product. The actual physical product, a pair
of socks, remains the same in all conditions, but the framing or
narrative associated with the socks varies. By experimentally
manipulating the narrative and holding constant confounding
factors, such as the appearance and quality of the socks, we can
explicitly compare people’s valuations of different ethical
narratives. There are real differences in what people are willing
to pay for different kinds of products. Some narratives appealed
primarily to particular groups, while others were universally
popular. For example, charity narratives seem to appeal to
everyone, whereas only certain sorts of people respond to green/
sustainable narratives. This study helps us better understand
how different demographic groups respond to different
responsibility and sustainability narratives. As a result, it can
help marketers tailortheir messaging to their targetcustomers.
Literature review
The idea that morals influence the marketplace is not new.
Fourcade and Healy suggest that markets are “explicitly
moral projects, saturated with normativity”(Fourcade and
Healy, 2007, pp. 299-300). Others, like Zelizer (2010) and
Quinn (2008), illustrate how shifts in religious and cultural
beliefs accompany changes in people’s moral evaluations of
market goods, such as life insurance. Beckert (2011)
highlights the social and cultural nature of prices,
demonstrating that networks, political forces and cultural
frames all influence our perception of value. Beckert gives
the example of ethical goods, products whose values are
based on more than their material qualities and are instead
rooted in ethical evaluations. Others such as Sassatelli
(2006),Thompson and Coskuner-Balli (2007),Shamir
(2008) and Maniates (2001) argue that some consumers try
to make the world a better place while they shop. Studies of
ethical consumption show how moral and ethical issues
(such as environmental issues and workers’rights) that were
once relegated to the political realm now permeate the
marketingofconsumerproducts.
Ethical consumption comprises a range of practices and
products. As a result, the literature is inconsistent in its
findings. Some studies look at green products, others at fair
trade and still others at charitable products, and each study
produces slightly different results. This is because ethical
consumption is not a single practice. Green shoppers are not
the same as those who buy fair trade (Elliott, 2013). Moral
causes –and the stories that convey them –impart value onto
otherwise everyday consumer objects, but the value of a
product also depends on characteristics of its consumer. The
remainder of this section reviews research on the wide range of
ethical products: goods that are fair trade (made under good
working conditions), sustainable/green, made in the USA,
BOGO (such as Tom’s Shoes and Warby Parker glasses) or
that offer charitable donations.
Fair trade
Many studies focus on fair trade, which are goods produced by
workers who are paid a fair wage. In this case, the utility
function of the consumer encompasses the wellbeing of others.
In a controlled behavioral experiment, Rode et al. (2008) tested
whether and under what conditions subjects will pay a
premium for fair-trade products. When there was no
explanation for price differentiation, shoppers chose the
cheapest product. When a higher price was explained by the
producers’compliance with child labor regulations, shoppers
were more likely to make the ethical choice despite a higher
price. One major issue with this study is its reliance on
undergraduate subjects, most of whom studied economics,
business and political science. Would these same findings hold
up among a more representative sample?
Field studies improve our understanding of how people
actually shop in the real world. In one field experiment,
Kimeldorf et al. (2006) set up displays of two identical sock
packages in a popular department store; the socks were
indistinguishable, except that one was marked “Buy GWC [...]
Good Working Conditions”and had an explanation that the
socks were produced in a safe environment without child labor.
Although the products were identical, one third of shoppers
chose GWC socks over the standard pair when there was a 10
per cent markup. Even with a 40 per cent markup, the GWC
socks made up one fourth of total sales. However, field
experiments such as this one suffer from major limitations.
Although they offer a more realistic setting than laboratory
experiments or surveys, their sites are far from representative of
the range of US shopping venues. The Kimeldorf et al. (2006)
experiment took place in a single department store. This design
makes it difficult to assess the effects of individual differences
on the response to fair trade goods owing to their selection into
the experimental setting.
What these studies do show us is that purchasing ethical
goods depends on both the cause and the cost, but what about
forces outside of the product itself, such as the shopper’s social
status? An experiment by Hudson et al. (2013) teases out the
effects of status display and information provision on the
purchase of fair trade versus conventional coffee. They argue
that if ethical consumption is a form of identity construction or
status enhancement, the presence of an audience will increase
one’s likelihood of purchasing fair trade products. If consuming
ethically is a source of personal satisfaction or altruism,
increased information about fair trade should increase the
likelihood of a fair trade purchase. Although 60 per cent of their
experiment subjects chose fair trade over conventional coffee,
neither an audience nor increased information affected their
subjects’odds of choosing fair trade. Conversely, being female,
previous knowledge of fair trade, liberal political ideology and
awareness of political issues increase the probability of choosing
fair trade. Thus, they conclude that demographics, political
ideology and consumer knowledge have an impact on one’s
preference for fair trade. Status display and increased
information did not motivate consumers to shop ethically.
These results may not be universal, though, as the study relied
solely on college students (Hudson et al.,2013).
While Hudson et al. (2013) report that women are more
likely to choose fair trade, Pedrini and Ferri found no evidence
of a gender difference in what they call “responsible
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consumption”, measured by self-reported “commitment to
gather the information necessary to evaluate the social and
environmental content of [...] consumption”and “awareness
on the possibility to exercise the power of legitimacy or
sanction”through their purchase (Pedrini and Ferri, 2014,p.
129). They find that the most responsible consumers are older,
well-educated and wealthy. Pedrini and Ferri (2014) employ a
large-scale telephone survey of over 5,000 Italians, but there are
no comparison studies in the USA.
Taylor and Boasson (2014) seek to reconcile conflicting
findings about the demographic profile of ethical shoppers by
disaggregating awareness, past purchases and willingness-to-
pay. They find that more liberal, younger, female and highly
educated consumers are the most willing to pay for fair trade.
More liberal, female, highly educated and wealthier
respondents are the most likely to be aware of fair trade and to
have bought fair-trade in the past. Although this is a step
toward making sense of conflicts within the literature, these
findings are specific to fair trade, so they cannot speak to
sustainable products or other sorts of altruistic goods.
Green goods
With Green products, consumers pay extra for a public good,
such as a clean environment. In a field experiment, Anderson and
Hansen (2004) displayed two virtually identical plywood
products side-by-side in Home Depot stores in Oregon; the only
visible difference between the products was an ecolabel and an
explanation of the environmental certification on one bin of
plywood. They found that the eco plywood sold twice as quickly
when the two products were priced the same, and eco plywood
made up 67 per cent of all plywood sold. With a 2 per cent price
premium, though, eco plywood sold much more slowly and
made up only 37 per cent of all plywood sold. Like the Kimeldorf
et al. (2006) sock experiment, this study cannot be generalized to
the population at large. The field sites are hardly representative:
Anderson and Hansen (2004) conducted their experiment in two
Home Depots in Oregon, and their results differed significantly
between the two locations. These findings might be specificto
each shop’s unique pool of shoppers.
Pedrini and Ferri (2014) find no evidence of a gender
difference in shoppers’preference for environmental products.
Instead, they report that income, education and age are all
positively associated with responsible consumption. According
to Elliott (2013), though, income is not a predictor of valuing
green goods. Instead, education, being a female and identifying
as an environmentalist increase one’saffinity for green
consumer goods (Elliott, 2013). Although Elliott also used a
mid-sized (N= 1,000) survey, her dependent variable, valuing
green goods, is basedsolely on a dichotomous survey item:
Some companies make products that say they help the environment because
they’re made using recycled materials, don’t use chemicals or will
decompose naturally after being used. Do you personally try to buy these
products, or not?”(Elliott, 2013, p. 302).
In reality, this tells us very little about how much these products
are worth to respondents or whether they would purchase these
items at a premium.
Made in the USA
Despite the popularity of “Small Business Saturdays”and a
pushback against outsourcing, few have investigated “Buy
American”consumption practices. These include patronizing
small businesses, supporting clothing lines manufactured in the
USA and more. Some investigate conscious consumers’
preference for local produce, but there are limited studies
addressing the “Made in the USA”consumer movement
(McEachern et al., 2010;Jekanowski et al.,2000;Zepeda and
Li, 2006;Zepeda and Nie, 2012). Although different than the
green and fair trade movements, this type of shopping falls
under the umbrella of ethical consumption, because it is yet
another way for consumers to enact social change through the
market. The sample in this study was limited to American
residents to test the power of a patriotic, anti-globalization
narrative.
Buy-one-give-one
On the other end of the spectrum is the more globally oriented
buy-one-give-one model. The buy-one-give-one model is
“widely embraced (and criticized) by consumers and
businesses alike as an effective model for creating both
commercial and social value”(Marquis and Park, 2014, p. 28).
This model was pioneered by Blake Myocoskie of TOMS
Shoes, a company that donates a pair of shoes to a child in need
for every pair sold. The success of TOMS prompted other
businesses to adopt the model, where an item is donated for
every product sold. Today, products such as Warby Parker
eyeglasses, Soapbox Soaps and 2 Degrees Foods sell products
that purport to tackle global issues from poor vision to hygiene
to childhood hunger. Although these products are popular, the
buy-one-give-one model has received little scholarly attention.
Charitable partnerships: donate.
The social impact [of buy-one-give-one products] is clearer, easier to
understand, and more personal than that of a traditional cause marketing
company, such as Product Red, that donates a percentage of sales (Marquis
and Park, 2014, p. 30).
Nonetheless, cause marketing remains popular among
consumers. Partnerships between companies and charities have
also been called “cause tie-ins”and “cause–brand
partnerships”(Rozensher, 2013, p. 181). Examples include
Product Red and General Mills’Boxtops for Education.
Typically, cause marketing involves a company donating a
portion of the profits from to an affiliated charity. Eighty five
per cent of consumers “have a more positive image of a product
or company when it supports a cause they care about”(Echo
Communications, 2010, p. 5). The most popular causes among
consumers are economic development and education, followed
closely by health and clean water. Many studies have found
women to hold more favorable attitudes toward cause
marketing than men (Ross et al., 1992;Moosmayer and
Fuljahn 2010). Youn and Kim (2008) find no evidence of a
gender effect but report that religious beliefs, social networks, a
sense of social responsibility, civic engagement and previous
charitable contributions have a positive relationship with
preference for cause-related marketing.
It is no surprise that when price and quality are equal 94
per cent of consumers prefer a brand associated with a good
cause (Cone/Echo, 2011). Meanwhile, only 19 per cent are
willing to switch to a more expensive brand associated with a
cause (Echo Communications, 2010). Thus, it is clear that
people have a preference for these charitable products. But how
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much more are they willing to pay? That question remains to be
answered.
Hypotheses
An overview of the literature exposes the diversity among
ethical consumption. Social responsibility is not a single
phenomenon but rather a collection of products and stories.
Just as there are a variety of types of narratives, there are
different sort of shoppers (Elliott, 2013). Some consumers will
prefer efficient hybrid cars, others green household products
and still others local food. Some goods, such as the Prius, allow
for status display. Others, such as recycled paper towels, allow
for little social payoff; they are privately used and disposed,
unlikely to be noticed by others. This study measures a
consumer good that, such as paper towels, is rarely noticed by
others or used as a status symbol: athletic socks.
To date, no single study has explored the full range of ethical
consumption. This study is the first step toward a more
comprehensive view of ethical consumption, one that fleshes
out several types of ethical stories. This survey experiment seeks
to measure three things. Who values ethical goods? What kinds
of ethical goods do they value? And finally, how much do they
value the causes or narratives attached to these goods?
My first hypothesis follows from a literature demonstrating
that people are willing to pay more for a cause. What remains to
be studied is how different sorts of ethical consumption
compare to one another. This hypothesis has two parts; the first
is rooted in the literature, whereas the second is more
exploratory, based on Cone’s Communications (2010) finding
that people value economic development and health more
highly than other charitable partnerships:
H1a. Respondents will be willing to pay more for all
narratives than for the control.
H1b. Narratives involving human livelihood, such as Fair
Trade, Donate and BOGO will be worth more than
Green or USA.
Some evidence suggests that green and fair trade products
appeal to women more than they do to men (Hudson et al.,
2013;Taylor and Boasson, 2014;Elliott, 2013;Ross et al.,
1992;Moosmayer and Fuljahn 2010). There has been little
research on gendered preferences for American-made,
charitable or BOGO products, but we might expect to find a
gender difference for these as well.
H2. Women will value all ethical narratives more than men.
Political ideology is associated with a preference for fair trade
goods (Hudson, Hudson and Edgerton, 2013;Taylor and
Boasson, 2014), so I expect that being a Democrat will be
positively associated with price for all ethical narratives.
H3. Democrats will be willing to spend more on ethical
goods than Republicans.
The evidence is mixed as to whether age affects people’s
preferences for ethical goods (Pedrini and Ferri, 2014;Taylor
and Boasson, 2014), but certain goods, such as BOGO
products, are marketed toward a younger audience. The same
is true of education and income; past research yields mixed
results (Pedrini and Ferri, 2014,Taylor and Boasson, 2014;
Elliott, 2013). It stands to reason, though, that those with more
disposable income will be willing to spend more for a cause. It
also seems logical that those with higher education will be
better informed and more likely to be aware of environmental
degradation, unfair working conditions and other moral issues
addressed by ethical consumption.
H4. Younger people will value ethical goods more highly,
especially Fair Trade, Green and BOGO narratives.
H5. More highly educated people will be willing to pay more
for ethical goods.
H6. Wealthier people will be willing to pay more for ethical
goods.
Finally, lifestyle factors impact one’s willingness to pay for
ethical products (Hudson et al., 2013). Those engaged in
political activism are likely to spend more on products
associated with labor and the environment. Those involved
with charities will be more drawn to products with a charitable
bent.
H7. Activists –those who protest, petition, boycott, vote and
contribute to political campaigns –will pay more for
ethical goods, particularly Fair Trade and Green
narratives.
H8. Those who donate and volunteer to charities will pay
more for Donate and BOGO narratives.
Methods
Data
To test these hypotheses, I recruited over 2,109 subjects
through Amazon’s Mechanical Turk and directed them to a
survey experiment. Mechanical Turk is an online labor market
where workers, or “Turkers”, can choose among computer-
based jobs posted by “requesters”. Studies conducted on
Mechanical Turk have high test–retest reliability, and high
internal consistency (Paolacci et al., 2010;Mason & Suri
2012). Previous research shows that Mechanical Turkers
behave similarly to traditional laboratory subjects (Horton et
al., 2011;Paolacci et al.,2010; Paolacci et al., 2010; Mason and
Suri 2012). Mechanical Turk is an ideal platform for hosting
this experiment and provides greater diversity of age, education
and income than a pool of undergraduate participants.
Design
Although surveys cannot realistically simulate day-to-day
shopping, they give us a sense of how much consumers value a
particular good. Unlike traditional surveys, survey experiments
such as this one ensure “that a given relationship involves cause
and effect”(Mutz, 2011). In this survey experiment, subjects
are randomly assigned into one of six treatments. Random
assignment allows us to establish unbiased causal inferences
about the effect of the independent variable, story narrative, on
our dependent variable, price.
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Mechanical Turk workers who chose to participate in the
study were directed to an online survey. After reading a consent
form and agreeing to participate, all subjects were asked to
imagine that they are shopping for a pair of socks. The survey
displayed a photo of a pair of athletic socks alongside a brief
narrative, and subjects were asked how much they would be
willing to pay for that pair of socks[1]. The photo and intro
were the same for everyone, but each subject was randomly
assigned into one of six conditions, which corresponded to six
different narratives (Table I).
These narratives cover a range of ethical issues: working
conditions, environmental sustainability, globalization,
children’s health and child poverty. Using a between-subjects
design ensures that subjects are unaware of alternative framings
and the purpose of the survey.
The survey features a consumer object that is gender-neutral
and relatively homogenous, something that nearly everyone
might need and that is not subject to fashion or individual taste:
a basic pair of athletic socks. Socks are relatively
undifferentiated, they look similar for both men and women,
and there are virtually no “high-end”or designer athletic socks.
People wear socks under clothing and shoes, so they are rarely
objects of status display. Because the same photo of socks was
used in all experimental conditions, I was able to isolate the
effect of the story from any tangible qualities of the item.
After a pilot study, it became clear that subjects were unsure
how much a basic pair of socks typically costs. Price estimates
ranged anywhere from $1 to $20, and many wrote in the
comments box that they had no idea how much socks should
cost. Research shows that consumers are surprisingly bad at
assigning accurate prices to consumer goods, although they are
capable of recognizing a good or bad deal (Jensen and Grunert,
2014;Aalto-Setala and Raijas 2003;Monroe and Lee 1999;
Vanhuele and Drèze, 2002). To account for this, the final
survey provided an anchor price for all experimental
conditions. All subjects were told the following:
Imagine you are shopping for a pair of athletic socks. You pass a rack of
basic socks, which cost $4 a pair. Next, you see a pair of socks that look
identical to the $4 pair, but the packaging indicates [...]
followed by the narrative. For the control narrative, subjects
were simply told the following:
Imagine you are shopping for a pair of athletic socks. You pass a rack of
basic socks, which cost $4 a pair. Next, you see a pair of socks that look
identical to the $4 pair.
The $4 mark provides a reference point, one that consumers
would have in a real-world shopping experience where they can
compare prices across similar items. It also helps reduce
variance so that differences in the outcome variable are a
product of the treatment and respondent characteristics, not
one’s knowledge (or lack, thereof) of price.
Predictors
At the end of the experiment, I collected demographic
information and indicators of political and civic engagement.
Once the survey was complete, duplicate survey responses were
discarded. Any repeat IP addresses were an indication that the
same individual took the survey more than once, so I removed
all but the first entry from each worker with a duplicate. One
respondent reported a price of $37, nearly ten times higher than
the average, so this respondent was dropped. Finally, all
incomplete surveys were dropped from the data set. There were
26 of these problem responses, leaving us with 2,109
observations in total. Tables II,III and IV illustrate the
demographic makeup of the sample.
As for political and civic involvement, subjects selected
which activities they participated in during the previous four
years. Previous studies have found these indicators to have a
Table I Treatment groups and narratives
Treatment group Narrative
Fair Trade The socks were made by a community enterprise that
supports good working conditions for low-income
women in Latin America. The proceeds of each sale go
directly to those women
Green The socks were made sustainably out of recycled
materials
USA The socks were manufactured in the United States
Buy-one-give-one
(BOGO)
For every pair sold, a pair of socks is given to a child in
need
Donate The proceeds go toward providing healthcare to
impoverished children
Control No narrative: Subjects are simply asked how much
they will pay for a pair of athletic socks
Table II Level of education
Level of education Frequency (%)
No schooling completed 1 0.0
Nursery school to 8
th
grade 2 0.1
9
th
,10
th
or 11
th
grade 7 0.3
12
th
grade, no diploma 17 0.8
High school diploma 190 9.1
Some college credit, but less than one year 208 10.0
One or more years of college, no degree 446 21.4
Associates degree (e.g. AA or AS) 190 9.1
Bachelor’s degree (e.g.: BA, AB, BS) 809 38.9
Master’s degree (e.g.: MA, MS, MSW or MBA) 153 7.3
Professional degree (e.g.: MD, DDS or JD) 34 1.6
Doctorate degree (e.g.: PhD, EdD) 26 1.2
Table III Income
Income Frequency (%)
Less than $10,000 198 9.5
$10,000-19,999 162 7.8
$20,000-29,999 281 13.5
$30,000-39,999 292 14.0
$40,000-49,999 208 10.0
$50,000-59,999 220 10.6
$60,000-69,999 137 6.6
$70,000-79,999 148 7.1
$80,000-89,999 84 4.0
$90,000-99,999 85 4.1
$100,000-149,999 162 7.8
$150,000 or more 59 2.8
No response 47 2.3
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significant relationship with consumption, especially ethical
consumption (Brenton, 2013;Hudson et al. 2013). These
involvement variables are only mildly correlated, and there
are no signs of multicollinearity (see Appendix 2)[2]. After
running balance checks to ensure that the randomization
worked appropriately[3], I subsetted by treatment and ran
regressions of price on all independent variables for each
treatment group.
Results
At the most basic level, we find that stories matter. There is a
significant difference in the price people report they will pay for
the same socks when they are associated with different
narratives (see Table V). The Fair Trade narrative is the most
valuable, followed by Donate, BOGO, USA, Green and
Control, in that order. T-tests indicate that each narrative is
significantly more valuable than the control (no narrative),
which supports H1. Additionally, the Fair Trade and Donate
narratives are valued significantly more highly than the BOGO,
Green and USA narratives. This supports H1a that people
prefer narratives associated with human welfare. Table VIII
displays the means and standard deviations for each treatment
group.
At the same time, this study suggests that people are sensitive
to reference points. We used a $4 anchor point in all conditions,
including control. Unsurprisingly, $4 was the median price for
four of the treatments (Green, USA, BOGO and Donate) and
the mode for five of them (all but control). Many people likely
selected $4 because they read it only seconds before; it was
primed and available in their short-term memory. Nonetheless,
the median price for all conditions was at least twice as large as
the control median and significantly higher than the control
mean. People were not willing to pay the anchor price for
normal (control) socks, but they would pay it for ethical socks.
This indicates that most of our respondents found the $4
anchor too high a price for plain socks. On the other hand, it
seemed a reasonable price for products associated with a cause
or moral narrative. In this sense, people do report a willingness
to pay a premium for ethical products.
The most obvious finding is that being male decreases the
amount one will pay overall but especially for Green narratives,
as we can see in Table II. T-tests on the full sample indicate
that women pay more than men overall at p<.05. This is true
regardless of whether we include the control treatment, but the
difference between men and women is not significant for
the control group alone. This supports H2, that ethical goods
are worth more to women than men, but individual regressions
(Table VI) indicate that the gender difference is only
statistically significant for green goods. Holding everything else
constant, a woman would be willing to spend 53 cents more for
a green pair of socks than a man. H2 holds for green goods, but
not for other ethical products[4]. We find that Democrats are
willing to pay more than Republicans for ethical products[5],
although the means for the Donate narrative are quite similar
(Table VII). When we run individual regressions for each
treatment (Table VIII), we find that Republicans spend 84
cents and 64 cents less than Democrats for Fair Trade and
Green products, respectively. This offers some support for H3,
at least for fair trade and green narratives. We can reject H3 for
control, USA, BOGO and donate narratives.
When we subset by treatment and run multiple regressions,
we get a better picture of who values each narrative
(Table VIII). Fair Trade products appeal to a specific group.
Younger people say they are willing to pay more for fair trade
goods than their older counterparts. Democrats report
significantly higher prices than Republicans and Independents.
Those who donate to political campaigns report higher prices
than non-donors, while those who do not sign petitions say they
will pay more than those who do.
Green goods attract a different group: women, highly
educated people, younger people and those who sign petitions
report higher prices for green goods. The USA narrative is
Table IV Respondents’age
Age in years Frequency (%)
18-20 135 6.5
21-25 548 26.3
26-30 531 25.5
31-35 350 16.8
36-40 168 8.1
41-45 108 5.2
46-50 70 3.4
51-55 71 3.4
56-60 48 2.3
61-65 23 1.1
66-70 6 0.3
7015 0.2
No answer 20 1.0
Table V Mean price and standard deviation by treatment group
Condition Control FT Green USA BOGO Donate
Mean 2.47 4.30 3.75 3.80 3.88 4.07
SD 1.40 1.86 1.69 1.75 1.81 1.81
Table VI Average price by gender and treatment
Treatment group Men Women
Control $2.43 $2.57
FT $4.38 $4.41
Green $3.56 $4.08
USA $3.85 $3.71
Donate $4.04 $4.12
BOGO $3.71 $4.12
Table VII Average price by political party and treatment
Republican Democrat
Control $2.27 $2.57
FT $3.80 $4.67
Green $3.26 $3.99
USA $3.83 $4.01
Donate $4.20 $4.19
BOGO $3.63 $4.23
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more valued by wealthier respondents and those in “Other”
political parties and is less valued by those who volunteer for a
charity. Surprisingly, there were no significant effects for any of
the demographic or involvement variables for the BOGO or
Donate narratives. These two conditions have high intercept
values and low coefficients, indicating that they tend to be
valued by to all sorts of people, not just a particular group.
Age has a significant negative effect on price for Fair Trade
and Green narratives, which at least partially supports H4. With
each additional year of age, reported price for fair trade and
green socks decreases by two cents. Or put another way, a 50-
year-old shopper would pay 60 cents more for a green pair of
socks than a 20-year-old shopper, all else being equal. Under
H4, we expected that young people would also value the
BOGO socks more highly than older people, but there was no
effect whatsoever for this narrative.
Education is only significantly associated with price for the
green narrative. With each additional year of education,
respondents are willing to pay 10 cents more. Holding all other
variables constant, a college graduate would pay 39 cents more
for the same pair of sustainable socks than a high school
graduate, and an medical doctor would pay 78 cents more. H5,
that those with high levels of education will be willing to spend
more for ethical goods, was only supported for green products.
Similarly, income is only positively associated with price for one
narrative: Made in the USA. Those with higher incomes say
they are willing to pay more for socks made in America than
those with lower incomes. H6 does not hold for the control,
Fair Trade, Green, Donate or BOGO treatment groups.
Again, we find that the data partially support H7 and H8.
Only a few measures of activism were significant. Voting,
volunteering for a political campaign, protesting, boycotting
and donating to a charity had no impact on price for any of our
narratives. Donating to a political campaign, petitioning and
volunteering for a charity had a statistically significant impact,
but only for certain narratives. Those who donate to political
campaigns say they will pay less for fair trade goods than those
who do not. People who petition are willing to pay more for fair
trade and green goods than those who do not. Finally, people
who volunteer for a charity say they will pay less for socks made
in the USA than non-volunteers.
Discussion
Theoretical implications
This article examines whether ethical narratives shape people’s
valuations of consumer products, whether different groups
value certain narratives more highly than others and whether
political and civic engagement influence the price people pay
for ethical goods. We find that there are differences in what
people will pay for the same product when it is associated with a
different ethical cause. There is not one sort of ethical shopper,
but many. This study helps us make sense of divergent findings
in the literature. Some report that gender impacts ethical
shopping (Hudson et al., 2013;Taylor and Boasson, 2014;
Elliott, 2013;Ross et al.,1992;Moosmayer and Fuljahn 2010),
while others argue that it has no effect (Pedrini and Ferri, 2014;
Youn and Kim, 2008). This study demonstrates that women
are willing to pay more than men for green goods, but there is
no significant difference for any other narratives.
Both common sense and previous research suggest that
richer people spend more on ethical goods, which are often
considered luxury items (Taylor and Boasson, 2014;Pedrini
and Ferri, 2014), but not all narratives appeal to the wealthy. I
Table VIII Multiple regression coefficients and standard errors for each treatment
Coefficient FT Green USA BOGO Donate Control
Intercept 3.34*(1.41) 2.44 (1.30) 1.50 (1.29) 5.61*** (1.39) 5.05** (1.46) 2.99*(1.12)
Male 0.08 (0.22) 0.53** (0.19) 0.09 (0.21) 0.27 (0.21) 0.06 (0.22) 0.15 (0.16)
Age 0.02 (0.01) 0.02*(0.01) 0.00 (0.01) 0.00 (0.01) 0.01 (0.01) 0.00 (0.01)
Asian 0.06 (0.35) 0.25 (0.31) 0.20 (0.34) 0.28 (0.34) 0.29 (0.39) 0.04 (0.25)
Black 0.36 (0.43) 0.52 (0.46) 0.95*(0.42) 0.35 (0.40) 0.34 (0.55) 0.08 (0.32)
Hispanic 0.25 (0.55) 0.30 (0.44) 0.19 (0.44) 0.12 (0.47) 0.60 (0.47) 0.11 (0.56)
Other Race 0.15 (0.73) 2.05 (1.65) 0.09 (0.92) 0.17 (1.08) 0.79 (1.33) 0.24 (0.55)
Log (income) 0.08 (0.12) 0.03 (0.10) 0.25*(0.12) 0.16 (0.12) 0.03 (0.12) 0.02 (0.09)
Education 0.03 (0.05) 0.10*(0.05) 0.02 (0.05) 0.02 (0.06) 0.04 (0.05) 0.01 (0.04)
Republican 0.84** (0.30) 0.63*(0.28) 0.26 (0.29) 0.46 (0.30) 0.00 (0.33) 0.32 (0.25)
Independent 0.52*(0.24) 0.04 (0.22) 0.26 (0.23) 0.46 (0.30) 0.00 (0.33) 0.32 (0.25)
Other Political Party 0.56 (0.39) 0.36 (0.30) 0.87** (0.33) 0.71 (0.37) 0.56 (0.35) 0.26 (0.28)
Voted pres 0.30 (0.28) 0.36 (0.25) 0.29 (0.27) 0.27 (0.27) 0.30 (0.30) 0.19 (0.20)
Voted S/L 0.12 (0.28 0.08 (0.24) 0.10 (0.26) 0.37 (0.25) 0.08 (0.28) 0.04 (0.19)
Political Volunteer 0.16 (0.56) 0.34 (0.48) 0.18 (0.48) 0.58 (0.69) 0.06 (0.59) 0.31 (0.50)
Political donate 0.91*(0.40) 0.14 (0.43) 0.14 (0.41) 0.52 (0.47) 0.02 (0.38) 0.18 (0.32)
Petition 0.43 (0.23) 0.55** (0.20) 0.11 (0.21) 0.23 (0.21) 0.26 (0.23) 0.24 (0.16)
Protest 0.69 (0.42) 0.14 (0.37) 0.13 (0.46) 0.58 (0.45) 0.38 (0.39) 0.53 (0.42)
Boycott 0.00 (0.32) 0.02 (0.31) 0.20 (0.31) 0.02 (0.45) 0.06 (0.36) 0.00 (0.32)
Charity donate 0.19 (0.23) 0.11 (0.20) 0.05 (0.22) 0.11 (0.21) 0.33 (0.22) 0.19 (0.17)
Charity Volunteer 0.11 (0.23) 0.31 (0.21) 0.41*(0.22) 0.12 (0.23) 0.03 (0.24) 0.04 (0.19)
F-statistic (p-value) 1.73 (0.03) 2.50 (0.00) 1.20 (0.25) 1.21 (0.25) 0.87 (0.63) 0.52 (0.96)
Notes: *Statistical significance at P<= 0.05; **statistical significance at P<= 0.01; ***statistical significance at P<= 0.001
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found that people with higher incomes are willing to pay more
for goods made in the USA, but there was no effect for other
treatment groups. Research suggests that the highly educated
are more likely to purchase ethical goods (Pedrini and Ferri,
2014). In this study, highly educated people report they will pay
more for green goods, but education is unrelated to price for all
other types of narratives. In short, there is no universal
relationship between gender, income or education and ethical
shopping. These findings highlight the importance of including
many types of ethical consumption in our research. This paper
provides a more comprehensive analysis of ethical consumption
than past research, one that parses out several different
narratives.
Ethical consumption blends politics, altruism and the
market. It follows that political activism, charitable
involvement and political orientation would be linked to
people’saffinity for ethical goods. In reality, only a few activism
measures had an effect: donating to a political campaign,
petitioning and volunteering for a charity. Political donors say
they will pay less for fair trade socks. People who sign petitions
report a willingness to pay higher prices for fair trade and green
narratives. Finally, charity volunteers value products made in
the USA less than those who do not volunteer.
Just as striking are the variables that do not significantly affect
the value of any ethical goods. We might imagine that the types
of people, who protest, boycott and volunteer for political
campaigns, would value ethical goods more highly. These
people seek to affect change in the political realm; they dedicate
their time to causes they care about. And yet, this study
demonstrates that they are not willing to pay a higher price for
ethical goods, products that affect change through the
marketplace. Nor do people who donate money to a charity
value charitable goods more highly. They are willing to give
money to a cause they deem worthy, but they won’t pay more
for goods attached to a cause –not even for the donate
narrative.
Perhaps ethical consumption appeals to those who want to
make a difference but don’t want to spend too much time or
energy doing it. Perhaps the most involved people, those who
protest and boycott, wouldn’tbuy products to benefit a cause.
Maybe they prefer to donate time and money instead. Maybe
for them, socks aren’t a viable solution for solving major
problems such as environmental degradation or child poverty.
Of course, this is entirely speculation. Further research is
needed to flesh out the full profile of ethical shoppers. Is this
form of consumption a substitute for real political involvement?
This question remains to be answered.
Practical implications
Fair trade, green and American-made products attract distinct
groups of buyers, but the two charitable narratives –BOGO
and Donate –seem universally popular. BOGO products burst
on the scene with the introduction of TOMS Shoes in 2007.
Since then, Warby Parker glasses, Soapbox soaps, 2 Degrees
granola bars, Smile Squared toothbrushes, BOGO Bowls pet
foods and even the blatant copycat BOB’S Shoes have shared
TOMS’success. Although these products are typically
marketed toward younger people, this study shows that they
seem to appeal to a more general audience. Products with a
donate narrative, such as bracelets for Susan J. Komen for the
Cure or Feed Bags that provide school meals for children, are
sold online, in boutiques, and even in Target. Our results show
that products whose proceeds go toward child health are
popular among all groups. Indeed, this narrative was the
second most highly valued overall.
Practically, this study examines what sorts of stories appeal to
particular demographics. The results can help socially and
environmentally responsible companies better understand their
target customer. By knowing which narratives appeal to which
demographic groups, marketers will be able to create more
effective messages. For example, a women’s fashion line made
in the USA may be more successful if it is marketed as
“ethically sourced”or “made under good working conditions”
than as “Made in the USA”. The reverse would be true for a
men’s fashion line. The design of this study allows us to
examine the value of different messages and to understand how
that value varies by consumer characteristics.
Limitations and future research
Of course, this study does not report what people actually buy –
or even what they would buy if they were in a real market.
Instead, it measures the value people place on different moral
causes or narratives. Survey experiments pose the threat of
social desirability bias, whereby subjects answer in ways that
make them look good or that will please the researcher. Because
subjects have no contact with the researcher and remain
completely anonymous, social desirability is unlikely to affect
the results. At the same time, it is always possible that subjects
realize the goal of the survey and craft their responses
accordingly. Furthermore, although Mechanical Turk tends to
yield high-quality survey results, my sample was far from
representative. There were more women, young people,
Democrats and highly educated respondents than in the US
population at large. This study includes only American
subjects, and results may be different for different countries.
Finally, socks are simply one among billions of consumer
objects available to shoppers. Perhaps socks are unique in some
unforeseen way. Further studies focusing on a different product
would improve our understanding of how ethical narratives
impact value. Furthermore, there are likely many factors
driving ethical consumption, and ethical products may
differentially appeal to people with characteristics we failed to
measure.
Nonetheless, this paper uncovers the complexity of ethical
consumption. The experimental design enables us to examine
the independent effect of ethical narratives on consumers’
valuations. By parsing out fair trade, green, American-made,
charity partnerships and BOGO, we can see that ethical
consumption is a collection of distinct consumer movements.
Products that explicitly donate to a charitable cause (Donate
and BOGO) are universally appealing, whereas others, such as
green and fair trade, appeal to a specific demographic. Further
studies should focus on the actual purchasing behavior of
consumers. Are the same consumers buying multiple types of
ethical consumption? For which types of products do people
tend to buy ethically? Food? Household items? Clothing? This
paper begins to flesh out a typology of ethical narratives, but it
also highlights the need for a more comprehensive analysis of
ethical consumption.
Understanding ethical consumers
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Notes
1 See Appendix 1 for a sample question.
2 I also tried to create an index using principal component
analysis (PCA). The few groupings PCA produced did not
make much sense logically, and these index variables did not
reach significance in any analysis. It seems that each of these
aspects of involvement are actually different things.
3 I also tested the assumption of normality and model fit.
See Appendix 3 for more information.
4t-Tests suggest that women pay more for men at
a
= 0.05
for all conditions, but in controlled individual regressions,
gender is only significant for green narratives.
5t-Tests indicate that Democrats pay more than
Republicans overall, at
a
= 0.05.
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Appendix 1. Question wording
Below is the shopping question for the control group. Only
the sentence below the sock varied from one treatment to
the next.
Appendix 2. Tests for multicollinearity
Below is a correlation matrix for the political and civic
involvement variables. As we might expect, voting in a
presidential election and voting in a state or local election are
moderately correlated, but the correlations are not strong for
any of the other variables.
The variation inflation factor (VIF) measures the severity of
multicollinearity in a model. The index measures how much
the variance of the regression coefficient is inflated because of
collinearity. A VIF value of higher than five indicates high
correlation, whereas a VIF of one is considered not correlated.
Here, we can see that all of our VIF values are less than two,
and most are close to one.
Table A1 Variation inflation factor for involvement variables
Variables VIF
Voted in a presidential election 1.624
Voted in a state/local election 1.672
Political Volunteer 1.135
Political Donate 1.158
Petition 1.137
Protest 1.151
Protest 1.184
Volunteer for a Charity 1.091
Donate to a Charity 1.132
Figure A1 Correlation matrix
Understanding ethical consumers
Kendall Cox Park
Journal of Consumer Marketing
Volume 35 · Number 2 · 2018 · 157–168
167
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Appendix 3. Tests for normality
The quantile–quantile (Q–Q) plot graphically displays
relationship between sample quantiles to theoretical quantiles.
The closer the data points to the line, the greater the validity of
the distributional assumption for a data set. That is, if the data
follow the assumed distribution, the plotted points will fall on
the straight line.
Corresponding author
Kendall Cox Park can be contacted at: kendallp@princeton.
edu
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Figure A2 Q-Q Plots
Figure A3 Standardized residuals
Understanding ethical consumers
Kendall Cox Park
Journal of Consumer Marketing
Volume 35 · Number 2 · 2018 · 157–168
168
Downloaded by Doctor Kendall Park At 07:45 02 April 2018 (PT)