1. Consumer Demand for Labor Standards: Experiments with Social Labeling of Imported Products
Prof. Michael Hiscox
Department of Government
Harvard University
Corporate Social Responsibility in the Global Environment
NYU Stern School, February 22, 2008

2. Will consumers pay extra for standards?
What do we know about consumer demand for standards?
Surveys: A majority of consumers say that would pay more for products made with good standards
Sales: The US market for Fair Trade Certified goods has grown by almost 50% per year since 2001.
Our field experiments to test consumer responses to ethical product labeling:
In-store experiments: label items, alter prices, record sales
Using eBay: auction labeled/unlabeled items, record prices

3. Will consumers pay extra for standards?
ABC Carpet and Home in New York City
Used comparable brands of towels and candles
Labeled one brand of each as being made under good working conditions
Raised prices of labeled brands by 10% and then 20%
Results: Sales of labeled brands rose 12-26%, and rose further when prices of labeled brands were raised

4. Will consumers pay extra for standards?
eBay
Coffee: created our own brand of fresh roasted beans; all Fair Trade certified.
Polo Shirts: sourced shirts from Cutter & Buck’s SA8000 certified suppliers
Method: we sold labeled and unlabeled coffee and shirts in simultaneous auctions.
Results: eBay shoppers paid a premium of 24% for Fair Trade certified coffee and 11% for SA 8000 certified shirts