Do Consumers Care about Ethics? Willingness to Pay for Fair-Trade Coffee

Purpose – The purpose of this paper is to investigate Chinese consumers’ willingness-to-pay (WTP) for fair trade coffee given different amount of product information. Although coffee is becoming more popular in China, the concept of fair trade is often found unfamiliar to most Chinese consumers. Design/methodology/approach – A total of 564 consumers were interviewed in Hubei, China. The key survey question asked consumers’ willingness to purchase a cup of fair trade coffee compared to a traditional cup of coffee. A modified payment card approach was used to elicit WTP. Before answering the purchase question, respondents were randomly assigned to one of three different information scenarios: basic definition, impact on sustainability and the environment, and information including both environmental and social implications. Findings – Results indicated that consumers were generally willing to pay additional amount for fair trade coffee. Information played an important role in determining what types of consumers were responsive to fair trade coffee. Furthermore, the amount of information provided and consumer WTP did not follow a linear relationship. Practical implications – Results obtained in this study are useful for coffee marketers to better target their promotion strategies. Originality/value – In contrast to China's fast growing coffee market, little is known about consumer preferences and far less on fair trade coffee. This study is the first of its kind to understand Chinese consumers’ preferences for coffee in general and for fair trade coffee in specific.

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Consumer Willingness to Pay for Fair Trade Coffee: A Chinese Case Study

Journal of Agricultural and Applied Economics ◽

10.1017/s1074070800000146 ◽

2012 ◽

Vol 44 (1) ◽

pp. 21-34 ◽

Cited By ~ 31

Author(s):

Shang-Ho Yang ◽

Wuyang Hu ◽

Malvern Mupandawana ◽

Yun Liu

Keyword(s):

Willingness To Pay ◽

Fair Trade ◽

Coffee Consumption ◽

Significant Rise ◽

Wuhan City ◽

Fair Trade Coffee ◽

Female Consumers ◽

Specific Focus ◽

Chinese Case

Coffee consumption in China has seen a significant rise in recent years. This study seeks to explore the determinants of coffee consumption in China with a specific focus on fair trade coffee. In a survey of 564 respondents in Wuhan City, consumers' willingness to pay (WTP) for fair trade labeled coffee was measured. This study uses an interval regression to investigate individual demographic and consumption characteristic impacts on WTP. Results show that on average, consumers were willing to pay 22% more for a medium cup of fair trade coffee compared with traditional coffee. In addition, other variables that indicated a higher WTP included female consumers, consumers who made their own coffee, and consumers who planned to consume more coffee in the following year.

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Label Performance and the Willingness to Pay for Fair Trade Coffee: A Cross- National Perspective

SSRN Electronic Journal ◽

10.2139/ssrn.1287567 ◽

2008 ◽

Author(s):

Arnab K. K. Basu ◽

Robert L. Hicks

Keyword(s):

Willingness To Pay ◽

Fair Trade ◽

Fair Trade Coffee ◽

National Perspective ◽

Cross National

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Effect of Environmental and Altruistic Attitudes on Willingness-to-Pay for Organic and Fair Trade Coffee in Flanders

Sustainability ◽

10.3390/su10124496 ◽

2018 ◽

Vol 10 (12) ◽

pp. 4496 ◽

Cited By ~ 5

Author(s):

Leonard Maaya ◽

Michel Meulders ◽

Nick Surmont ◽

Martina Vandebroek

Keyword(s):

Willingness To Pay ◽

Fair Trade ◽

Choice Experiment ◽

Food Products ◽

Purchase Decisions ◽

Stated Choice ◽

Fair Trade Coffee ◽

Purchasing Behaviour ◽

Organic Label ◽

Buying Behaviour

Sustainability labels, on food products, provide information to consumers that the product has been produced in an ethical and environmentally friendly way. We explore the knowledge and purchasing behaviour of the organic label and fair trade label. Secondly, we investigate the willingness-to-pay (WTP) for food products bearing organic and fair trade labels. Thirdly, we examine the effects of demographic characteristics and environmental and altruistic attitudes on WTP for both organic and fair trade labels. Lastly, we evaluate the correlation in WTP for organic and fair trade labels. We draw our conclusions by analyzing a stated choice experiment on consumers’ coffee buying behaviour in Flanders, Belgium. Our results suggest that knowledge of the fair trade label is higher than that of the organic label. The importance of the organic and fair trade labels on coffee purchase decisions, as well as their WTP estimates, were similar. We found a high correlation in WTP for both labels. Our results indicate significant effects of environmental and altruistic attitudes on WTP for both organic and fair trade labels as they apply to coffee.

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