Consumer preferences for fair labour certification

Abstract

High-profile cases of exploitative labour practices have increased concerns over agricultural working conditions. However, it is unclear to what extent the public is willing to trade-off fair working conditions for higher prices. We implement a large-scale survey in Greece to uncover consumer preferences for a food labelling system that certifies fair working conditions for the workers employed in agricultural production. With our most conservative estimates, we find that consumers are willing to pay an average premium of 53 cents of a Euro per 500 g, 95 per cent CI [43.9, 62.3], for strawberries with fair labour certification. This result suggests that consumers do value the better treatment of workers in the agricultural sector. It also suggests that there is a current market failure, created by the asymmetry of information between consumers and producers, that can be the basis of discussion for alternative labelling schemes involving fair labour labels. We also tested a number of known biases associated with consumer behaviour or the contingent valuation method and found the positive willingness-to-pay result to be robust.

Publication
European Review of Agricultural Economics
Andreas C. Drichoutis
Andreas C. Drichoutis
Associate Professor of Consumer Behavior

My research interests are focused on, but not limited to, the economics of nutrition/obesity, contingent valuation and experimental auctions methods to elicit consumers’ valuations, choice under risk, inter-temporal decision making and applied demand analysis. Most of my research applies experimental economics methods to answer questions relevant for agricultural economists and decision scientists.