Will Consumers Spend More to Do Good? Yes.
When the research starts to show what many of us have been hoping/intuiting for a while - that consumers will up the ante to purchase goods with more socially or environmentally responsible approaches - it’s a good day. As Ray Fisman reports in a recent Slate article, Harvard researchers Michael Hiscox and Nick Smyth studied how consumers shopped for goods (in Manhattan’s ABC Carpet store), and how their purchase decisions changed, when there was a fair labor practice certification. Turns out - when the certification was mentioned, sales went up, and then - get this:
“A few weeks later, Hiscox and Smyth were back in the stockroom, marking
up the prices on the labeled towels and candles by 10 percent. Quite
remarkably, this increase made people buy even more towels and candles
(a 20 percent increase for towels and 30 percent for candles). The
authors suggest this may be because the higher prices made the
products’ fair-labor claims more credible.”
Certainly, as the article mentions, the ABC Carpet consumer is represented by a very high income and liberal-minded person, so we can’t then simply assume that middle American, middle income shoppers would respond the same way. At least, not yet. But, do shopping trends in urban east and west coast markets eventually emerge in the middle of the country?
Hmmm. Why do you suppose Wal-Mart is so busy working on sustainability issues in Arkansas…
P.S. The Hiscox/Smyth study is not yet published, but this link to it was published in the Slate piece.
