D Microeconomics
Refine
Year of publication
- 2020 (1)
Document Type
- Master's Thesis (1)
Language
- English (1)
Has Fulltext
- yes (1)
Keywords
This research analyzes the effects that eco-labels have on the demand for organic (Bio) and Fairtrade (FT) food products. The thesis also discusses the individual determinants and motivations behind those effects. The analysis builds on data obtained from a self-programmed and self-conducted survey, with a sample of 869 students from different universities of Cologne, Germany. The Bio/FT preference is measured experimentally by randomly assigning individuals to treatment and control groups. The experiment simulates life decisions using actual pictures and prices of four products: packed and processed spaghetti, fresh tomatoes, packed raw meat, and packed orange juice.
The existence, size, and direction of statistically significant eco-label effects were obtained with two sample tests of proportions. The results prove that the FT label has a positive differential effect on consumer’s demand. The presence of the FT label makes the purchase of this juice 9.1% higher than other juices not labeled as FT. This finding confirms the hypothesis that eco-labels have a positive effect on sustainable consumption. A surprising finding is that the presence of the Bio label lowers the purchase of organic pasta and tomatoes 7.7% and 9.4% respectively. This finding is interesting because it suggests that Bio labels are not driving the demand for sustainable tomatoes or pasta for this population. Regional and cheaper alternatives are preferred by consumers in this cases.
The motivations behind consumer choices of different options were thoroughly analyzed. Binomial logistic regressions and qualitative text analysis show that the variance in the intention to consume eco-labeled food is explained mainly by price concerns and attitudes about value for money, but also by the influence of life partners as shopping referents, and the perceived behavioral controls of time and ability to monitor compliance of label standards, thus trust them.
The final remarks support the use of the Fairtrade eco-label as a market-based instrument to guide sustainable food consumption among young adults in this context, and propose changes that could make the Bio label more attractive for the targeted population. The thesis demonstrates which individual factors should be inevitably considered when implementing labeling to foster sustainable consumption. Hence, it is useful for evaluations of public and private certification schemes, and for companies that support sustainable food markets. Projects looking to understand and drive sustainable production and consumption decisions should consider this reading.