New MIT study show consumers willing to, and DO, pay more for goods produced fairly


"In surveys consumers say that they care deeply about whether the products they buy are made in workplaces with fair labor standards rather than in sweatshops. But the existing market for such ethically differentiated goods is small and there is no clear evidence that consumers would actually choose ethically labeled products over counterparts if given the choice. We provide new evidence on consumer behavior from a large-scale field experiment conducted with Gap Inc. in 111 Banana Republic factory stores. We find that labels with information about fair labor standards had a substantial positive effect on sales among a segment of shoppers even in outlet stores where customers are predominantly concerned with prices. The labels increased sales of a more expensive women's item by 14%. The labels had no discernable impact on sales of lower-priced items."

Jens Hainmueller and Michael J. Hiscox, "The Socially Conscious Consumer? Field Experimental Tests of Consumer Support for Fair Labor Standards," MIT Political Science Department Research Paper No. 2012-15, May 18, 2012.

ALSO NY TIMES article: Stephanie Clifford, "Some Retailers Say More About Their Clothing’s Origins," New York Times, May 8, 2013.

[verified 4/17/14]