IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v158y2019icp34-41.html
   My bibliography  Save this article

The Implicit Price for Fair Trade Coffee: Does Social Capital Matter?

Author

Listed:
  • Bosbach, Moritz
  • Maietta, Ornella Wanda

Abstract

This study aims to ascertain whether the implicit price paid for Fair Trade coffee in regular supermarkets is influenced by the stock of social capital in the territory where consumers live. A hedonic regression set-up is adopted, based on Italian scanner data taken at NUTS3 level. Regressors include attributes described on the label, which include separate certifications for Fair Trade and organic/eco-label status, plus various indicators of social capital and their interactions with the Fair Trade and organic/eco-label attributes. The implicit consumer price paid for the Fair Trade attribute is significantly and positively affected by a social capital proxy, the ratio of co-op members to total employment.

Suggested Citation

  • Bosbach, Moritz & Maietta, Ornella Wanda, 2019. "The Implicit Price for Fair Trade Coffee: Does Social Capital Matter?," Ecological Economics, Elsevier, vol. 158(C), pages 34-41.
    • Handle: RePEc:eee:ecolec:v:158:y:2019:i:c:p:34-41
    DOI: 10.1016/j.ecolecon.2018.12.010
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S092180091830199X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecolecon.2018.12.010?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Yang, Shang-Ho & Hu, Wuyang & Mupandawana, Malvern & Liu, Yun, 2012. "Consumer Willingness to Pay for Fair Trade Coffee: A Chinese Case Study," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(1), pages 1-14, February.
    2. Paolo Buonanno & Daniel Montolio & Paolo Vanin, 2009. "Does Social Capital Reduce Crime?," Journal of Law and Economics, University of Chicago Press, vol. 52(1), pages 145-170, February.
    3. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2004. "The Role of Social Capital in Financial Development," American Economic Review, American Economic Association, vol. 94(3), pages 526-556, June.
    4. Douglas Hodgson, 2011. "Age–price profiles for Canadian painters at auction," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 35(4), pages 287-308, November.
    5. Fredrik Carlsson & Jorge García & Åsa Löfgren, 2010. "Conformity and the Demand for Environmental Goods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 47(3), pages 407-421, November.
    6. Richard Carew, 2000. "A Hedonic Analysis of Apple Prices and Product Quality Characteristics in British Columbia," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 48(3), pages 241-257, November.
    7. Isabella Santini, 2008. "Social capital and its impact on the production process," International Journal of Management and Decision Making, Inderscience Enterprises Ltd, vol. 9(5), pages 509-525.
    8. Goddard, E. W. & Akiyama, T., 1989. "United States demand for coffee imports," Agricultural Economics, Blackwell, vol. 3(2), pages 147-159, May.
    9. Damiano Fiorillo, 2007. "Relazioni sociali, norme sociali e fiducia: un'analisi sulla letteratura empirica," Economia & lavoro, Carocci editore, issue 2, pages 207-207.
    10. Luigi Benfratello & Massimiliano Piacenza & Stefano Sacchetto, 2009. "Taste or reputation: what drives market prices in the wine industry? Estimation of a hedonic model for Italian premium wines," Applied Economics, Taylor & Francis Journals, vol. 41(17), pages 2197-2209.
    11. Valéry Bezençon & Sam Blili, 2009. "Fair Trade Managerial Practices: Strategy, Organisation and Engagement," Journal of Business Ethics, Springer, vol. 90(1), pages 95-113, November.
    12. Kim Klyver & Noel J. Lindsay & Suleiman K. “Sul” Kassicieh & Gary Hancock, 2017. "Altruistic investment decision behavior in early-stage ventures," Small Business Economics, Springer, vol. 48(1), pages 135-152, January.
    13. Elder, Sara D. & Zerriffi, Hisham & Le Billon, Philippe, 2012. "Effects of Fair Trade Certification on Social Capital: The Case of Rwandan Coffee Producers," World Development, Elsevier, vol. 40(11), pages 2355-2367.
    14. De Devitiis, Biagia & D'Alessio, Massimiliano & Maietta, Ornella Wanda, 2008. "A comparative analysis of the purchase motivations of Fair Trade products: the impact of social capital," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44148, European Association of Agricultural Economists.
    15. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    16. Francesco Bimbo & Alessandro Bonanno & Rosaria Viscecchia, 2016. "Do health claims add value? The role of functionality, effectiveness and brand," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 43(5), pages 761-780.
    17. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    18. Joni Valkila & Pertti Haaparanta & Niina Niemi, 2010. "Empowering Coffee Traders? The Coffee Value Chain from Nicaraguan Fair Trade Farmers to Finnish Consumers," Journal of Business Ethics, Springer, vol. 97(2), pages 257-270, December.
    19. Caroline Doran, 2010. "Fair Trade Consumption: In Support of the Out-Group," Journal of Business Ethics, Springer, vol. 95(4), pages 527-541, September.
    20. Loureiro, Maria L. & Lotade, Justus, 2005. "Do fair trade and eco-labels in coffee wake up the consumer conscience?," Ecological Economics, Elsevier, vol. 53(1), pages 129-138, April.
    21. Yang, Shang-Ho & Guan, Huanda & Hu, Wuyang & Liu, Yun, 2012. "Product Information and Willingness-to-Pay: A Case Study of Fair Trade Coffee on Chinese Market," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124360, Agricultural and Applied Economics Association.
    22. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
    23. Sabrina Teyssier & Fabrice Etile & Pierre Combris, 2015. "Social- and self-image concerns in fair-trade consumption," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 42(4), pages 579-606.
    24. Margherita Scarlato, 2001. "Capitale sociale e sviluppo economico: un'analisi empirica per le province italiane," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2001(1).
    25. Veronika Andorfer & Ulf Liebe, 2012. "Research on Fair Trade Consumption—A Review," Journal of Business Ethics, Springer, vol. 106(4), pages 415-435, April.
    26. Maria Bigoni & Stefania Bortolotti & Marco Casari & Diego Gambetta & Francesca Pancotto, 2016. "Amoral Familism, Social Capital, or Trust? The Behavioural Foundations of the Italian North–South Divide," Economic Journal, Royal Economic Society, vol. 126(594), pages 1318-1341, August.
    27. Monier-Dilhan, Sylvette & Bergès, Fabian, 2016. "Consumers' Motivations Driving Organic Demand: Between Self-interest and Sustainability," Agricultural and Resource Economics Review, Cambridge University Press, vol. 45(3), pages 522-538, December.
    28. Kumju Hwang & Hyewon Kim, 2018. "Are Ethical Consumers Happy? Effects of Ethical Consumers' Motivations Based on Empathy Versus Self-orientation on Their Happiness," Journal of Business Ethics, Springer, vol. 151(2), pages 579-598, August.
    29. Jörg Hetterich & Sebastian Bonnemeier & Michael Pritzke & Anthimos Georgiadis, 2011. "Ecological sustainability -- a customer requirement? Evidence from the automotive industry," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 55(9), pages 1111-1133, October.
    30. Borisova, Ekaterina & Govorun, Andrei & Ivanov, Denis & Levina, Irina, 2018. "Social capital and preferences for redistribution to target groups," European Journal of Political Economy, Elsevier, vol. 54(C), pages 56-67.
    31. Manning, Stephan & Boons, Frank & von Hagen, Oliver & Reinecke, Juliane, 2012. "National contexts matter: The co-evolution of sustainability standards in global value chains," Ecological Economics, Elsevier, vol. 83(C), pages 197-209.
    32. Ana C. Dammert & Sarah Mohan, 2015. "A Survey Of The Economics Of Fair Trade," Journal of Economic Surveys, Wiley Blackwell, vol. 29(5), pages 855-868, December.
    33. Marco Costanigro & Jill J. McCluskey & Ron C. Mittelhammer, 2007. "Segmenting the Wine Market Based on Price: Hedonic Regression when Different Prices mean Different Products," Journal of Agricultural Economics, Wiley Blackwell, vol. 58(3), pages 454-466, September.
    34. Aidt, T.S. & Dutta, Jayasri & Loukoianova, Elena, 2006. "Democracy comes to Europe: Franchise extension and fiscal outcomes 1830-1938," European Economic Review, Elsevier, vol. 50(2), pages 249-283, February.
    35. Boix, Carles & Posner, Daniel N., 1998. "Social Capital: Explaining Its Origins and Effects on Government Performance," British Journal of Political Science, Cambridge University Press, vol. 28(4), pages 686-693, October.
    36. Landon, Stuart & Smith, Constance, 1997. "The Use of Quality and Reputation Indicators by Consumers: The Case of Bordeaux Wine," MPRA Paper 9283, University Library of Munich, Germany.
    37. Paolo Rizzi & Selma Popara, 2006. "Il capitale sociale: un'analisi sulle provincie italiane," RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO, FrancoAngeli Editore, vol. 2006(1).
    38. Andreas Chatzidakis & Sally Hibbert & Andrew Smith, 2007. "Why People Don’t Take their Concerns about Fair Trade to the Supermarket: The Role of Neutralisation," Journal of Business Ethics, Springer, vol. 74(1), pages 89-100, August.
    39. David Reinstein & Joon Song, 2012. "Efficient Consumer Altruism and Fair Trade Products," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 21(1), pages 213-241, March.
    40. Galarraga, Ibon & Markandya, Anil, 2004. "Economic techniques to estimate the demand for sustainable products: a case study for fair trade and organic coffee in the United Kingdom," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 4(07), pages 1-26.
    41. repec:hal:pseose:halshs-01203174 is not listed on IDEAS
    42. Jason Abrevaya, 2002. "Computing Marginal Effects In The Box-Cox Model," Econometric Reviews, Taylor & Francis Journals, vol. 21(3), pages 383-393.
    43. Thursby, Jerry G, 1982. "Misspecification, Heteroscedasticity, and the Chow and Goldfeld-Quandt Tests," The Review of Economics and Statistics, MIT Press, vol. 64(2), pages 314-321, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Piras, Simone & Pancotto, Francesca & Righi, Simone & Vittuari, Matteo & Setti, Marco, 2021. "Community social capital and status: The social dilemma of food waste," Ecological Economics, Elsevier, vol. 183(C).
    2. Florence TOUYA, 2019. "Relationships and Nature of Contracts in the Distribution Structure for Responsible Trade," Working Papers 2018-2019_10, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Oct 2019.
    3. Florence Lachet-Touya, 2019. "Relationships and nature of contracts in the distribution structure for responsible trade," Working Papers hal-02937865, HAL.
    4. Dick Durevall, 2020. "Fairtrade and Market Efficiency: Fairtrade-Labeled Coffee in the Swedish Coffee Market," Economies, MDPI, vol. 8(2), pages 1-17, April.
    5. Florence TOUYA, 2019. "Relevance of Potential Supply Structures in Frameworks involving Consumer's private Information: the Case of Fair Trade," Working Papers 2018-2019_12, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Aug 2019.
    6. Florence Lachet-Touya, 2019. "Relevance of potential supply structures in frameworks involving consumer's private information: the case of fair trade," Working Papers hal-02937902, HAL.
    7. Joachim J. Schouteten & Xavier Gellynck & Hendrik Slabbinck, 2021. "Do Fair Trade Labels Bias Consumers’ Perceptions of Food Products? A Comparison between a Central Location Test and Home-Use Test," Sustainability, MDPI, vol. 13(3), pages 1-17, January.
    8. Nesrine Merbah & Sonia Benito-Hernández, 2024. "Consumer Willingness-to-Pay for Sustainable Coffee: Evidence from a Choice Experiment on Fairtrade and UTZ Certification," Sustainability, MDPI, vol. 16(8), pages 1-12, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Veronika Andorfer & Ulf Liebe, 2012. "Research on Fair Trade Consumption—A Review," Journal of Business Ethics, Springer, vol. 106(4), pages 415-435, April.
    2. Tully, Stephanie M. & Winer, Russell S., 2014. "The Role of the Beneficiary in Willingness to Pay for Socially Responsible Products: A Meta-analysis," Journal of Retailing, Elsevier, vol. 90(2), pages 255-274.
    3. Volker Lingnau & Florian Fuchs & Florian Beham, 2019. "The impact of sustainability in coffee production on consumers’ willingness to pay–new evidence from the field of ethical consumption," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 30(1), pages 65-93, April.
    4. Rommel Salvador & Altaf Merchant & Elizabeth Alexander, 2014. "Faith and Fair Trade: The Moderating Role of Contextual Religious Salience," Journal of Business Ethics, Springer, vol. 121(3), pages 353-371, May.
    5. Wang, Xiaojin, 2016. "Is Fair Trade Fair for Consumers? A Hedonic Analysis of U.S. Retail Fair Trade Coffee Prices," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236344, Agricultural and Applied Economics Association.
    6. Trestini, Samuele & Giampietri, Elisa & Szathvary, Serena & Dal Bianco, Andrea, 2018. "Insights on the Alleged Imitation of Prosecco Wine Name: The Case of the German Market," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 9(4), August.
    7. Schollenberg, Linda, 2011. "So how much do you pay for ethical consumption? Estimating the hedonic price for Fair Trade coffee in Sweden," HUI Working Papers 31, HUI Research.
    8. Jasmin Droege, 2022. "The Handmade Effect: A Model of Conscious Shopping in an Industrialised Economy," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 60(2), pages 263-292, March.
    9. Takahashi, Ryo & Todo, Yasuyuki & Funaki, Yukihiko, 2018. "How Can We Motivate Consumers to Purchase Certified Forest Coffee? Evidence From a Laboratory Randomized Experiment Using Eye-trackers," Ecological Economics, Elsevier, vol. 150(C), pages 107-121.
    10. Nadia Fiorino & Emma Galli & Nicola Pontarollo, 2021. "Does Social Capital Affect Voter Turnout? Evidence from Italy," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 156(1), pages 289-309, July.
    11. Alessandro Bonanno, 2016. "A Hedonic Valuation of Health and Nonhealth Attributes in the U.S. Yogurt Market," Agribusiness, John Wiley & Sons, Ltd., vol. 32(3), pages 299-313, July.
    12. Friedrichsen, Jana & Engelmann, Dirk, 2018. "Who cares about social image?," European Economic Review, Elsevier, vol. 110(C), pages 61-77.
    13. Sanja Lutzeyer, 2008. "Estimating Hedonic Prices for Stellenbosch wine," Working Papers 15/2008, Stellenbosch University, Department of Economics.
    14. Durevall, Dick, 2017. "Who Benefits from Fairtrade? Evidence from the Swedish Coffee Market," Working Papers in Economics 708, University of Gothenburg, Department of Economics.
    15. Waldrop, Megan & McCluskey, Jill, 2016. "Impact of Organic, Sustainable, and Biodynamic Wine Making Practices on Wine Prices," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235217, Agricultural and Applied Economics Association.
    16. Alvina Gillani & Smirti Kutaula & Leonidas C. Leonidou & Paul Christodoulides, 2021. "The Impact of Proximity on Consumer Fair Trade Engagement and Purchasing Behavior: The Moderating Role of Empathic Concern and Hypocrisy," Journal of Business Ethics, Springer, vol. 169(3), pages 557-577, March.
    17. Alessandro Bonanno & Francesco Bimbo & Marco Costanigro & Alfons Oude Lansink & Rosaria Viscecchia, 2019. "Credence attributes and the quest for a higher price – a hedonic stochastic frontier approach," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 46(2), pages 163-192.
    18. Jacobo Núñez & David Martín‐Barroso & Francisco J. Velázquez, 2024. "The hedonic price model for the wine market: A systematic and comparative review of the literature," Agricultural Economics, International Association of Agricultural Economists, vol. 55(2), pages 247-264, March.
    19. David Bürgin & Robert Wilken, 2022. "Increasing Consumers’ Purchase Intentions Toward Fair-Trade Products Through Partitioned Pricing," Journal of Business Ethics, Springer, vol. 181(4), pages 1015-1040, December.
    20. Megan E. Waldrop & Jill J. McCluskey & Ron C. Mittelhammer, 2017. "Products with multiple certifications: insights from the US wine market," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 44(4), pages 658-682.

    More about this item

    Keywords

    Ethical consumption; Hedonic regression; Scanner data;
    All these keywords.

    JEL classification:

    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:158:y:2019:i:c:p:34-41. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.