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Does Fair Trade Compete with Carbon Footprint and Organic Attributes in the Eyes of Consumers? Results from a Pilot Study in Scotland, The Netherlands and France

Abstract

Several studies on ethical and social food attributes have shown that consumers, especially in developed countries, are willing to pay a price premium for fair trade foods products. However, there is a scant literature on how consumers’ preferences and willingness to pay (WTP) for fair trade products are affected by the presence of other ethical food attributes. To fill this gap, a choice experiment was conducted in Scotland, the Netherlands and France to assess consumers’ preferences and WTP for ethical attributes, i.e., fairtrade, organic, and lower carbon footprint, of bananas and to find out whether this ethical food attributes are competing in real markets. The results showed that in the three countries consumers are willing to pay a price premium for the three ethical food attributes. The results showed that in the current market situation these ethical foods are not generally competing against each other. Nonetheless, they are likely to become competing for consumer’s money at least when: (1) the price of organic foods is decreased significantly, (2) the price for fairtrade food products is set higher than consumers’ WTP, and (3) bananas labeled as having lower carbon footprint are made available in retail stores and sold at a price lower than consumers’ WTP.

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Fig. 1

Notes

  1. This could happen due to the increasing interest of consumers in developed countries to contribute to the global effort to reduce global warming by, among others, purchasing sustainable food products (Wiser 2007; Whitehead and Cherry 2007; Jeanty et al. 2007; Bollino 2009; Onozaka and McFadden 2011).

  2. We must mention that the size of our sample is not representative of the whole population of the three countries. However, the main objective of this study is to gain insight on consumers’ preferences and willingness to pay for different ethical food attributes in the three countries and not to produce country-wide estimates.

  3. These values were calculated assuming that the origin of bananas is Canary Islands—Spain (697 g of CO2), from Ghana (1.143 kg of CO2), Ecuador (1.880 kg of CO2), and Indonesia (2.619 kg of CO2). Please notice that the origin of the products was not revealed to participants. This is important to obtain a clean estimation of participants’ WTP for carbon footprint, otherwise, their WTP for carbon footprint will be confounded with their WTP for the origin of bananas.

  4. The estimated individual WTPs in the Scottish data were obtained in pound sterling. For a clean comparison across countries, the individual WTP were multiplied by 1.28 to convert them from pound sterling to Euro.

  5. We tested the normality of the distribution of respondents’ WTP for each ethical attribute in each country. All the distributions were found to be non-normal. As a result a non-parametric test (Wilcoxon rank-sum test) was used to test whether respondents’ WTP for the different ethical attributes are statistically different from each other.

  6. We are making this assumption because bananas certified as having lower carbon footprint are not currently sold in any of the three countries’ grocery stores.

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Correspondence to Faical Akaichi.

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Akaichi, F., de Grauw, S., Darmon, P. et al. Does Fair Trade Compete with Carbon Footprint and Organic Attributes in the Eyes of Consumers? Results from a Pilot Study in Scotland, The Netherlands and France. J Agric Environ Ethics 29, 969–984 (2016). https://doi.org/10.1007/s10806-016-9642-7

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