The Ethical Consumer And The Blue Light Special
The Wall Street Journal published some interesting research on consumer purchasing behavior as regards ethically produced products. The study conducted by a doctoral student at Western Ontario University, studied the price consumers were willing to pay under various circumstances.
The researchers studied coffee and asked consumers to determine how much they would pay for ethically produced coffee; how much they would pay for coffee produced by an unethical company and then tested at what level a product is considered ethically produced.
There were a variety of different permutations in the study but the results were a bit surprising!
Consumers, in general will pay more for ethically produced goods
Consumers, at the moment don’t care if it’s 100% ethically produced or 5% ethically produced…they’ll pay the same premium
Very aware consumers, as in aware of what ethically produced means and who care about it are willing to pay a bigger premium for ethically produced goods.
Some consumers will still by products even if they are unethically produced…if the price is right!
In general I didn’t find much of this surprising except that consumers didn’t really seem to be wiling to pay a higher price for MORE ethically produced goods. Though, on second though, this isn’t all that surprising since our Byzantine labeling system makes it hard to understand what producing ethically means in the first place.
Bad news in the short run for social entrepreneurs who place a priority on doing good, as opposed to doing well (making money) but, in the long run, the general public will become better informed and highly ethical goods will be able to demand a premium.
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Image Credit: kkoshy at Flickr under Creative Commons License
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