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The ethical consumer: How much is sustainability worth to consumers?
Last registered on August 13, 2019

Pre-Trial

Trial Information
General Information
Title
The ethical consumer: How much is sustainability worth to consumers?
RCT ID
AEARCTR-0004576
Initial registration date
August 13, 2019
Last updated
August 13, 2019 5:07 PM EDT
Location(s)

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Primary Investigator
Affiliation
University of Cologne
Other Primary Investigator(s)
PI Affiliation
PI Affiliation
University of Cologne
PI Affiliation
University of Cologne
Additional Trial Information
Status
In development
Start date
2019-08-14
End date
2019-10-31
Secondary IDs
Abstract
Previous results from unincentivized surveys suggest that consumers value Corporate Social Responsibility (CSR) and that CSR activities, such as socially and environmentally sustainable production of goods, increase customers’ purchase intention and their stated willingness to pay for products. However, real markets show that the share of sustainable products is still very small – particularly in the textile market. One reason for this discrepancy might be that customers show appreciation for CSR activities in surveys and hypothetical decision situations, but that in real markets, when it comes to their own money, they are not willing to pay a price premium for sustainably produced products. Evidence from field experiments shows mixed results. We conduct a randomized experiment to test whether consumers’ willingness to accept, elicited in an incentivized auction (BDM), increases when they are informed that a product is sustainably produced.
External Link(s)
Registration Citation
Citation
Conrads, Julian et al. 2019. "The ethical consumer: How much is sustainability worth to consumers?." AEA RCT Registry. August 13. https://doi.org/10.1257/rct.4576-1.0.
Experimental Details
Interventions
Intervention(s)
We investigate if consumers value sustainable production of goods by measuring the increase in their willingness to accept (WTA) for backpacks, when they are either informed about sustainability aspects in the production or not, using the incentive compatible Becker-DeGroot-Marschak auction (BDM) (Becker, DeGroot, & Marschak, 1964). Participants are given a backpack that they can immediately sell back in two BDM auction rounds. After inspecting the backpack, participants state their minimum selling price in a first pre-treatment auction round. Then, depending on the treatment, participants receive different information about the backpack. In the control treatment, participants are given information about functionality and wearing comfort of the backpack, e.g. being water-repellent. In the sustainability treatment, participants are additionally informed that the production of the backpack was socially and environmentally sustainable. In a second post-treatment auction round, they are then again asked to state their minimum selling price. Subsequently, a number is randomly drawn to be the price. If participants’ bid is higher than the price, they keep the backpack. If their bid is equal to or lower than the price, they must sell the backpack at the drawn price.

We create variation by handing out different informational sheets about the backpack. The sheets contain a picture of the backpack on the left. On the right, participants in the control treatment find the following text with three bullet points:
The backpack is characterized by
• high functionality (e.g. expandable from 26 to 33 liters, padded laptop compartment, 2 accesses to main compartment: rolltop system and circulating zipper),
• outstanding wearing comfort (e.g. ergonomic shoulder straps, padded back section, removable and adjustable chest strap),
• water-repellence.
In the sustainability treatment, the following two bullet points are added to the above description.
• a socially compatible production, i.e. regular auditing of working conditions of the backpack production by the independent third party Fair Wear Foundation (including occupational safety reviews, employee training and no child labor), and long and transparent partnership with suppliers,
• an ecologically compatible production (e.g. fabrics made from 100% recycled PET bottles, backpack free of PFCs harmful to the environment and health and continuous reduction of negative environmental impacts in production as certified by the independent third party bluesign)
Intervention Start Date
2019-08-14
Intervention End Date
2019-10-31
Primary Outcomes
Primary Outcomes (end points)
Difference in willingness to accept
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
We investigate if consumers value sustainable production of goods by measuring the increase in their willingness to accept (WTA) for backpacks, when they are either informed about sustainability aspects in the production or not, using the incentive compatible Becker-DeGroot-Marschak auction (BDM) (Becker, DeGroot, & Marschak, 1964). Participants are given a backpack that they can immediately sell back in two BDM auction rounds. After inspecting the backpack, participants state their minimum selling price in a first pre-treatment auction round. Then, depending on the treatment, participants receive different information about the backpack. In the control treatment, participants are given information about functionality and wearing comfort of the backpack, e.g. being water-repellent. In the sustainability treatment, participants are additionally informed that the production of the backpack was socially and environmentally sustainable. In a second post-treatment auction round, they are then again asked to state their minimum selling price. Subsequently, a number is randomly drawn to be the price. If participants’ bid is higher than the price, they keep the backpack. If their bid is equal to or lower than the price, they must sell the backpack at the drawn price.

Details:
The experiment is conducted at university campuses in Cologne. The experimenter asks people that pass by the experimenter’s stand if they want to participate in a consumer survey that is conducted by the University of Cologne. They are told that, if they are drawn in a lottery, they can win a backpack or money. If they agree to participate, they are randomly allocated to either the control or the sustainability treatment. Then, participants are given detailed written instruction that are read aloud to them by the experimenter. To test and enhance participants’ comprehension of the method, one training round with an apple is conducted. Then, participants make their pre-treatment bid. The backpack is available at the experimenter’s stand for participants to inspect. Afterwards, depending on the treatment, participants receive one of two different informational sheets about the backpack, either with or without sustainability related information. Then, participants make their post-treatment bid. In the end, participants answer various questions: They are asked if they know the brand (yes/no) and its CSR activities (5 point Likert scale), if they like the design (5 point Likert scale), about their current need of a backpack (5 point Likert scale) and how well they know the backpack market (5 point Likert scale). Then, they are asked to answer demographical questions about gender, age, vocational situation, field of studies and highest educational degree. Finally, they are asked if they usually buy socially and environmentally sustainable clothes and accessories (2 questions: 5 point Likert scale) and if they have paid more in the past for clothes and accessories that were produced socially and environmentally sustainably (2 questions: 5 point Likert scale). Participants that are allocated to the sustainability treatment are asked additionally if they know Fair Wear Foundation and bluesign (2 questions: yes/no).
Experimental Design Details
Not available
Randomization Method
After subjects agree to participate in the experiment, the experimenter randomly draws a card from an envelope that determines the treatment group.
Randomization Unit
Individual
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
n.a.
Sample size: planned number of observations
360 individuals
Sample size (or number of clusters) by treatment arms
180 individuals
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Based on power analysis in which we used data from a pilot (n=20) of the control treatment, we determined n=360 to have a power of 80 percent for a minimal detectable effect size of 5%. The minimal detectable effect size of 5% refers to a between treatment increase of the post-treatment bid.
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
IRB Approval Date
IRB Approval Number