Ethical product premiums: antecedents and extent of consumers' willingness to pay

Abstract

Corporate social responsibility is now high on the strategic agendas of major retailers, as consumers demonstrate growing ethical awareness and concern. However, evidence regarding consumers' willingness to pay the price premiums often associated with ethical products is inconclusive. Studies have adopted various survey-based and experimental methods, focusing upon different product categories, each with particular ethical issues. This study included a Zaltman Metaphor Elicitation Technique (ZMET) exploratory investigation then a mail survey of 1000 consumers, indicating willingness to pay ethical premiums across 6 categories. Demographics proved to be poor predictors, although education explained some variance in willingness to pay. Ethical motivations, measured within the framework of the Decisional Balance Scale, proved stronger antecedents, providing guidelines for the communication of ethical attributes. Implications for retailers and opportunities for researchers are discussed.

Keywords:

• ethical consumption
• ethical premiums
• willingness to pay
• ethical elasticity
• decisional balance scale
• transtheoretical model

Acknowledgements

The authors are grateful for the funding from the Economic and Social Research Council (PTA-030-2003-00099) and for the support provided by the Manchester Retail Research Forum and its member companies.