Consumers would pay 10% green premium: study
Important for shoppers to feel they're making a difference
Last Updated: Wednesday, September 23, 2009 | 4:27 PM ET
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Consumers are willing to pay a small premium for goods and services they think are environmentally sustainable, but they would rather just adopt greener behaviour, a report from the Network for Business Sustainability suggests.
Researchers found consumers typically willing to pay 10 per cent more for sustainable products.
"What we found is consumers will pay a small green premium, but they are even more likely to make a more socially conscious choice," said lead researcher June Cotte, associate professor at the Richard Ivey School of Business at the University of Western Ontario.
"So instead of paying for a green shopping bag, they will bring one from home."
The study surveyed 30 years of research and more than 1,700 articles on socially conscious consumerism. The focus then narrowed to 91 articles offering various takes on whether consumers would reward sustainable businesses, either by paying more for goods or services or making socially responsible choices.
The reporting gap
Consumers often expect the greener product to be of the same quality and price as the non-sustainable one, the report said. This may account for the frequent difference between what consumers say they will do and what they actually do, the researchers said.
"If you call a consumer and tell him you are researching socially conscious consumption, and then ask him if he is willing to pay extra for products that are more socially conscious, you’ve effectively told him what you want him to say," Cotte said.
"That doesn’t mean he is going to act on that the next time he is in the store."
It's better for those trying to predict consumer behaviour in this field to study consumer buying habits rather than relying on self-reporting, the report said.
Making a difference
Researchers found consumers are also much more likely to act in a socially responsible manner if they believe their purchase choice can make a real difference.
In one study cited in the report, consumers' impressions that they were making a difference were six times more important to their overall decision to buy than their concern for the environment.
The implication for those selling green merchandise was clear: make sure customers know how their purchases contribute to a better world.
The Canadian-based Network for Business Sustainability is a group of academics, consultants, businesses and non-governmental organizations that commissions studies on various aspects of sustainability.
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