- Is There a Demand for Labor Standards? Evidence from Field Experiments in Social Labeling
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- by Hiscox, Michael; Smyth, Nicholas F.B.
- A majority of surveyed consumers say they would be willing to pay extra for products made
under good working conditions rather than in sweatshops. But as yet there is no clear evidence
that enough consumers would actually behave in this fashion, and pay a high enough premium, to
make social product labeling profitable for firms. We provide new evidence on consumer
behavior from experiments conducted in a major retail store in New York City in 2005. Sales rose
for items labeled as being made under good labor standards, and demand for the labeled products
actually rose with price increases of 10-20% above pre-test (unlabeled) levels. If the results hold
more generally, there is a strong latent consumer demand for labor standards that many more
retailers and producers could satisfy profitably by switching to certified and labeled goods.
- Publication Type: WCFIA Working Paper
- Published Date: November 2005
- Field of Interest: Global Issues
- Hiscox, Michael, and Nick Smyth. "Is There a Demand for Labor Standards? Evidence from Field Experiments in Social Labeling." Working Paper 2008-0058, Weatherhead Center for International Affairs, Harvard University, November 2005.