Consuming Values: Estimating Consumer Demand for Corporate Social Responsibility

Our intervention contains three separate treatments. The first provides accurate information on firm CSR activities. The second provides accurate information on consumer boycotting behaviors. The third provides incentives for respondents to share private beliefs and values on Facebook.

2021-11-04

2021-12-12

Our primary outcome is the change (posterior - prior) in an individual's willingness-to-pay for a firm's $50 gift card.

We elicit willingness-to-pay using the Becker–DeGroot–Marschak method (BDM), and we do so both before and after the experimental information provision in our experiment.

Favorability towards the firm; Beliefs on other Corporate Social Responsibility dimensions

Favorability is measured on a 0-100 feeling thermometer, as in the American National Election Studies (ANES). We'll also analyze an index combining willingness-to-pay and favorability outcomes to reduce sampling noise. We may analyze consumer's prior beliefs about different firm dimensions to see: the general level of accuracy in consumer prior beliefs; over which CSR dimensions consumers have more accurate and less diffuse prior; which existing ESG ratings correlate most strongly with consumer beliefs; which types of respondents have more accurate prior beliefs; for which types of firms do respondents seem to have systematically miscalibrated beliefs.

Our experiment first elicits baseline beliefs about firms and preferences across five randomly selected firms per respondent, as well as priors about consumer behaviors. We then provide the information treatments to those randomly selected, and re-elicit beliefs and valuations (providing the Facebook sharing treatment during the valuation step).

Our experiment proceeds in the following steps:
1. Randomization: For a given individual, we draw their information treatment’s dimension d∈{Political,Environmental,Diversity,Placebo}. We also draw a set of five firms F from our complete set of firms*.
2. Benchmarks: We tell individuals the average value among Fortune 500 firms for each CSR dimension, to use as a benchmark when making their subsequent predictions.
3. Prior Beliefs: For each CSR dimension, individuals simultaneously predict the value associated with each firm in F. Individuals also predict the share of Republicans and Democrats that report participating in a boycott.
4. Gift Card Valuations Practice: Respondents complete an example and comprehension checks for our gift card valuation elicitation used in (5) and (9).
5. Prior Gift Card Valuations and Favorability: For each firm f∈F, we then elicit the value $x such that the respondent is indifferent between $x in AmeriPoints** vs. a $50 e-gift card at firm f. Individuals also report their favorability toward each firm on a feeling thermometer.
6. Firm CSR Treatment: Randomly selected individuals receive the true values for all firms F along dimension d (some receive political information for all firms, some receive placebo information for all firms, etc.).
7. Strategic Incentive Treatment: Randomly selected individuals receive information on the share of Republicans and Democrats who have reported boycotting any firm before.
8. Posterior Beliefs: Repeat (3), eliciting beliefs about a firm’s CSR and the share of Republicans and Democrats that report participating in a boycott.
9. Posterior Gift Card Valuations and Favorability: Repeat (5), eliciting for each firm a respondent’s valuation (in AmeriPoints) of a $50 firm gift card.
a. Facebook Sharing Treatment: Prior to giving their posterior gift card valuations, randomly selected individuals are notified about the option to later share their values on Facebook in exchange for a higher probability of winning a lottery for AmeriPoints.
10. Firm Gift Card Ranking and Familiarity: Individuals rank $50 in AmeriPoints and $50 gift cards at each of the firms f∈F. They also indicate their familiarity with each of these firms.
11. Ideal Points: We ask individuals for their most preferred point on each CSR dimension (e.g., the share of firm donations which should go to Republicans).
12. Network Ideology: We ask about the ideology of a respondent’s Facebook friends.

Accuracy in all belief predictions is incentivized by a lottery for AmeriPoints, with answers closer to the true value increasing a respondent’s probability of winning this lottery. Our gift card value elicitations are also incentivized by a separate lottery. For at least 50 individuals randomly selected as lottery winners (2% of respondents), we randomly draw a firm f, a number x∈[0,100], and a gift card elicitation. The lottery winners are then given their choice between a $50 e-gift card at firm f and $x in AmeriPoints, as determined by the preference they expressed in the chosen gift card elicitation.

*The complete set of firms is a subset of consumer-oriented Fortune 500 firms for which political, environmental, and gender diversity information is available from the specified sources, and which offer $50 e-gift cards.
**AmeriPoints are the typical cash-equivalent incentive scheme used by NORC’s AmeriSpeak® Panel, through which TESS fields successful proposals. AmeriPoints can be redeemed for Mastercard® Rewards Cards, Amazon.com gift cards, movie tickets, restaurant gift cards, and other rewards. For detail, see https://www.amerispeak.org/faq.

Randomization done by a computer, embedded in the experimental program.

Individual

Yes

2,500 individuals. Responses are clustered in that while an individual is asked about five firms and three CSR dimensions, a given individual will see true CSR information along the same information dimension for all five firms.

We plan to collect responses from 2,500 individuals. Each respondent is asked about 5 firms and 3 CSR dimensions, giving a total of 12,500 observations at the respondent-firm level and 37,500 observations at the respondent-firm-CSRdimension level.

Our sample has three independent randomization dimensions with 4, 2, and 2 groups respectively (including the control/placebo group). These three dimensions are cross-randomized, resulting in 4x2x2 = 16 treatment arms. A roughly equal number of participants are randomized into each of these 16 conditions, giving about 156 individuals per treatment arm. Each individual is also randomly assigned 5 firms F (from our full set of eligible Fortune 500 firms), which they will be asked about throughout the survey.

Exact power calculations given our empirical strategy are complicated. While our treatment indicator is assigned at the respondent level, the experimental variation varies at the respondent-firm level. We also are using an instrumental variables estimation approach that includes pre- and post-intervention measurement and additional control variables. To gain some understanding of power, we will compute the required sample size to detect a 0.15 SD effect under pure, individual randomization and assume a design effect of 4. At α = .05, β = .80, we need about 700 respondent-firm pairs in each of the four treatment-control groups (placebo, political, environmental, and diversity) or 2,800 total respondent firm-pairs under pure randomization. Scaling 2,800 by the design effect of 4, this gives a requirement of 11,200 respondent-firm pairs. Since our survey provides 5 firms for each respondent, this leads to a required sample size of 2,240 respondents. Given our 2,500 respondents, we can detect a minimum effect size between 0.14 and 0.15 standard deviations.