Sixty percent of consumers are willing to pay extra for a socially responsible product, according to the research of New York University Stern’s marketing department chair Russ Winer and Ph.D. student Stephanie Tully.
Professor Winer and Tully examined the willingness of consumers to pay for socially responsible products in their new paper: "Are People Willing to Pay More for Socially Responsible Products: A Meta-Analysis."
In the largest study of its kind, Winer and Tully examined two dependent variables across 83 research papers—the proportion of people who are willing to pay extra for socially responsibly products (e.g., jeans made from recycled materials) and the percentage premium that people are willing to pay for those goods.
Their research also found:
- On average, the same consumers were willing to pay a 17.3% premium for goods that provided a social or environmental benefit.
- The percentage premium was slightly lower for socially responsible goods that are durable (e.g., furniture) versus nondurable (e.g., toilet paper).
- Consumers are willing to pay the highest premium for goods that provide benefits to humans (e.g., good labor practices), followed by purchases that benefit animals (e.g., bigger cages), followed by goods that are environmentally friendly.
“This is good news for marketers and retailers who work with socially responsible products—particularly nondurable goods such as paper towels,” explains Winer, the school's William H. Joyce professor of marketing. “Our study shows that retailers can obtain larger price premiums for frequently purchased, nondurable goods that are socially responsible than for durable products.”
[Image courtesy of NYU Stern]