Willness to Pay - HaBrookshire Norum

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Willingness to Pay for Socially Responsible Products: Case of Cotton Apparel

This report was written for Dr. Richard C. Leventhal as a manuscript for

the Journal of Consumer Marketing

by

Jung E. Ha-Brookshire Assistant Professor

Textile and Apparel Management University of Missouri

137 Stanley Hall Columbia, MO 65211 Phone. 573-882-6316 Fax. 573-882-3289

E-mail. [email protected]

Pamela S. Norum Associate Professor

Textile and Apparel Management University of Missouri

137 Stanley Hall Columbia, MO 65211 Phone. 573-882-2934 Fax. 573-882-3289

E-mail. [email protected]

April 15, 2010

Funding for this project was awarded in part through research grants and/or in-kind support awarded to the authors by Bayer CropScience, Missouri Department of Agriculture, and Issues

and Answers.

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About the authors

Jung E. Ha-Brookshire is an assistant professor in the Department of Textile and Apparel

Management at the University of Missouri. Her research interests include firm/industry identity

issues, global sourcing strategies, corporate/consumer social responsibility practices in textiles

and apparel marketplaces, and experiential learning. She is the corresponding author and can be

contacted at [email protected].

Pamela S. Norum is an associate professor in the Department of Textile and Apparel

Management at the University of Missouri. Her research interests include consumer demand

analyses, household expenditures, and retail pricing in the marketplace.

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Willingness to Pay for Socially Responsible Products: Case of Cotton Apparel

Abstract

Purpose – This study investigated significant factors influencing consumers’ willingness to pay

a premium for three different socially responsible products—organic cotton, sustainable cotton,

and U.S.-grown cotton shirts.

Design/methodology/approach –Through random-digit-dialing, the study data was collected

from 500 respondents nationally via telephone surveys. The survey data was analyzed using

stepwise regression and mean comparisons.

Findings –More than half of the respondents indicated that they were willing to pay a premium

for organic, sustainable, and U.S.-grown cotton shirts ($5.00 or more for these cotton shirts at the

$30.00 retail value). Consumer attitudes toward socially responsible apparel, attitudes toward

environment, age, and gender were found to be significant factors for consumers’ willingness to

pay a premium. Four apparel product evaluative criteria, brand name, laundering requirements,

color, and fit, were also found important for consumers’ willingness to pay a premium.

Research limitations/implications – Generalization from the study findings must be done with

care due to the telephone survey mode.

Practical implications –Apparel businesses planning to offer organic, sustainable, or U.S.-

grown cotton apparel products may want to emphasize certain tangible benefits, such as strong

brand, reasonable price, easy care, color, and fit, concurrently with intangible benefits, such as

feeling good by helping society and environment.

Originality/value – The findings showed relationships among attitudes, product evaluative

criteria, demographic characteristics, and willingness to pay a premium for three different

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options of socially responsible cotton apparel, in order to help close the gap between attitudes

and behavior in consumer research.

Keywords – Social responsibility, Willingness to pay, Attitudes, Consumers

Paper type – Research paper

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Willingness to Pay for Socially Responsible Products: Case of Cotton Apparel

Introduction

It is not surprising to receive over 1.26 million hits when “socially responsible products” is typed

into the Google search engine. This result demonstrates the popularity of socially responsible

products and the extent of consumer demand for socially responsible consumption. Businesses

are paying attention to these demands as sources of new sales and profit. Products with

certifications, such as “Environmentally Friendly,” “Dolphin Safe® Tuna (Tuna caught by

fishing methods that do not harm dolphins and protect the marine ecosystem),” “Fair-trade

Coffee,” and “Child Labor Free,” have become popular as a way to target specific consumers

who are concerned with the social and natural environments. These certifications help explain

producers’ causes and products’ benefits; however, the bottom line question for business

managers is “will consumers pay more for socially responsible products?” or “does it pay to

offer socially responsible products?”

While businesses are searching for answers, today’s consumers are faced with multiple

competing decision-making factors, such as price, style, quality, and convenience, in addition to

their moral and ethical responsibility. Consumers are constantly measuring and evaluating

options between their wants to be socially responsible and their desire for positive shopping

experiences. Sometimes, consumers’ sense of moral responsibility is greater than their need for a

bargain price while, in other cases, they may choose convenience over ethical obligations. Thus,

a gap between consumers’ attitudes and actual purchase behaviors exists, and this gap is even

greater in the area of ethical or socially responsible consumption (De Pelsmacker et al., 2005).

Consequently, it is extremely difficult to find out what truly affects consumers’ willingness to

pay a premium for socially responsible products.

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To help answer business managers’ bottom line question while reducing the consumers’

attitude-behavior gap, this study examined the significant factors influencing consumers’

willingness to pay for three different types of socially responsible products— (a) a shirt made out

of organic cotton, (b) a shirt made out of cotton produced through sustainable farming practices,

and (c) a shirt made out of U.S. grown cotton. Cotton is one of the major fibers used in apparel,

constituting over 52% of the worldwide demand for apparel fiber in 2004 (Kadolph, 2007).

Despite being natural, renewable, and recyclable, cotton has been criticized due to its excessive

water consumption and growers’ high use of pesticides and other insecticides. To overcome

these negative images, the cotton farming and production industries have pushed for more cotton

to be produced organically or through sustainable farming practices. In addition, in an effort to

save jobs and increase economic activities within the United States, cotton producers have

promoted U.S.-grown cotton consumption as socially responsible.

The study first offers a brief overview of social responsibility, social responsibility in

cotton consumption, and willingness to pay research. Then the research questions are presented

followed by the research method and data collection procedures. The study results follow, and,

finally, the paper concludes with a summary of the study findings, the contributions to the

literature, the implications of the findings, and future research opportunities.

Literature review and research questions

Socially responsibility

As consumers’ awareness about societal and environmental issues rises, many businesses have

been finding ways to tap into the consumers’ concerns regarding social responsibility. Although

corporate social responsibility [CSR] is nice to have, businesses must consider both the

economic expectation for profits and the potential legal consequences of marketing that

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emphasizes social responsibility when considering it (Carroll 1999). Similarly, the majority of

consumers do not make their consumption decisions solely based on social responsibility without

considering other product attributes, such as price, quality, convenience, and/or brand name

(Boulstridge and Carrigan 2000). In other words, although social responsibility is important for

businesses and consumers, profitability often overrides CSR, and price and quality tend to be

more important for consumers in many cases.

Social responsibility means different things to different people. In an effort to define the

concept of social responsibility clearly, Dickson and Eckman (2006) recently presented the three

major conceptual dimensions of CSR in the textile and apparel field. They are (a) a business

orientation focusing on the environment, people, products, and the impact on society, (b) a

business philosophy that balances ethics/morality with profitabilty, and (c) a business drive for

outcomes that would positively effect, or do little harm, to the world and people. From the

consumer perspective, Ha-Brookshire and Hodges (2009) defined socially responsible consumer

behavior (SRCB) as the behavior of a consumer who in one or more consumption steps from pre-

purchase to post-disposal stages (including product information search, acquisition, usage,

storage, disposal, and post-disposal evaluation) bases his or her decision on a desire to minimize

or eliminate any harmful effects and to maximize any beneficial impacts on society.

Business and consumption activities based on social responsibility can be seen in many

different aspects of our lives. Some consumers strive for socially responsible consumption, and

various businesses are tapping into those consumers’ needs and wants. Some forms of socially

responsible consumption benefit the natural environment, while others are concerned with

human welfare. Product labels such as “Environmentally Friendly,” “Dolphin Safe® Tuna,” and

“Legally Logged Timber” are specifically targeting consumers who are concerned about the

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natural environment. Certifications such as “Fair-trade Coffee” and “Child Labor Free” serve

consumers who would like to benefit other people during their consumption. Some consumers

exercise their social responsibility by purchasing more products that help society, while others

boycott certain products that harm society.

Efforts to shorten the distance between the actual beneficiaries and consumers have also

been made. For consumers who are more specifically interested in improving the environment

and helping people close to them, many businesses have been using place (or location) as one of

the focal points of branding efforts. Products with local growers’ signatures or stamps help

consumers be close to the actual beneficiaries of their responsible consumption choices. The

California wine industry has developed successful place-based marketing and regional branding

strategies, specifically targeting “consumers who are anxious to know where products come

from” (Bruwer and Johnson 2010; Dimara and Skuras 2005, p. 91). Since September 11, 2001

(9/11 hereafter), the popularity of products that are “Made in USA” has been increasing across

product categories (Lee et al., 2003).

Today, consumers who would like to make responsible consumption choices face many

different factors and situations. The question of how consumers perceive and evaluate the

differences in the impact of their socially responsible consumption is still being explored, and the

answers are not straightforward. For example, what are the differences in the social and

environmental impacts of organic coffee grown by Peruvian farmers in comparison to

conventional cotton grown by Texan farmers? How about tuna caught by American fishermen

with conventional fishing methods as opposed to organic wine produced by French wine

makers? Previous research suggests that the answers to these questions depend on personal

values, beliefs, knowledge, and attitudes toward the environment and people in local, regional,

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and national settings (Dickson, 2000; Pelsmacker et al., 2005). Thus, many studies have been

conducted that examine consumers’ decision making processes and influential factors in those

processes.

Particularly, in the national setting, consumer researchers were interested in country-of-

origin (COO) effects. COO has been typically associated with the terms: ethnocentrism,

nationalism, bias toward imported products, stereotyping, and patriotism (Bannister and

Saunders, 1978; Drozdenko and Jensen, 2009; Chao and Rajendran, 1993; Lee et al., 2003;

Olsen et al., 1993; Sharma et al., 1995; Wang and Lamb, 1983). Sometimes, these terms were

used to describe a consumer movement against globalization, and open-door trade policies. In

the history of the United States, patriotism has been “an ebb and flow fervor” (Kosterman and

Feshbach, 1989, p. 257). More recently, after 9/11, patriotism was shown to be stronger than

ever before. The economic recession in 2008 further promoted nationalism or ethnocentrism in

the United States. Saving jobs in the United States has been a top priority of the U.S.

government. In this light, purchasing goods made in the United States has come to be considered

socially responsible consumer behavior. Online directories of U.S.-made products, such

as www.madeinusa.org and www.stillmadeinusa.com, demonstrate this consumer desire for

U.S.-made goods. These sites clearly communicate the message of “Made in America may save

America; so do the right thing,” specifically appealing to consumers who are concerned about

U.S. jobs and communities. According to this view, consuming U.S.- made goods is a socially

responsible behavior.

Social responsibility in cotton consumption

Cotton is one of the major fibers used in apparel, meeting over 52% of the worldwide demand

for apparel fiber in 2004 (Kadolph, 2007). Despite being natural, renewable, and recyclable,

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cotton has been criticized due to excessive water consumption and use of pesticides and

insecticides during its production. Just as consumers developed negative opinions of food grown

from genetically modified organisms (GMOs) increasing the demand for organic food, cotton

consumption has followed similar trends. Although GMO food and GMO cotton may have

different usages and applications (i.e., food is eaten while cotton is worn), GMO cotton has

suffered from the negative image of being considered an “unnatural” product. To help solve

these issues, Cotton Incorporated, a non-profit cotton research and promotional organization, has

recently launched a campaign to educate consumers and industry members about the sustainable

aspects of cotton farming and consumption (Cotton Incorporated, 2010).

When it comes to social responsibility in cotton consumption, there are a few different

options for consumer choices—organic cotton, cotton from sustainable farming practices, and

U.S. grown cotton. First, organic cotton is cotton produced within a set of strict United States

Department of Agriculture (USDA) standards, enforced by USDA-certifying agents who

annually inspect fields and growing operations for adherence to National Organic Program

(NOP) standards (Cotton Incorporated, 2010). NOP standards require a three-year conversion, or

change over, of land before organic crops can be harvested (USDA, 2008). NOP standards

specify farming practices must maintain or improve the natural resources of the operation,

including soil and water quality. Thus, synthetic substances are prohibited and GMOs are not

allowed (USDA, 2008).

Second, cotton produced from sustainable farming practices is cotton produced from

certain farming practices that involve new technologies, methods, and uses for the cotton plant.

The core focus of sustainable farming practices is to meet the current needs for productivity and

profit without compromising the ability of future generations to meet their needs (Cotton

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Incorporated, 2010). These practices focus on reducing the use of pesticides, water, land, and

energy from levels typical of conventional farming practices. Sustainable farming may or may

not use GMOs.

While the first two options are centered on the impact of cotton production on the natural

environment, the third option, U.S.-grown cotton, specifically focuses on saving jobs and

increasing economic activities within the United States. Currently, there are more than 18,000

cotton farmers and support staff in the United States and approximately 13.5 million bales are

produced annually (Anderson, 2009). U.S.-grown cotton appeals to consumers who are

concerned about saving jobs and being able to produce agricultural products in the United States.

Willingness to pay in cotton apparel consumption

Whether individuals consume certain products to help people or improve the environment, the

bottom line question for businesses is “will consumers pay any premium for the products that are

developed, manufactured, and delivered in socially responsible manners?” De Pelsmacker and

his colleagues (2005, p. 364) pointed out that there has been a major discrepancy in the

relationship between consumers’ attitudes and behaviors, especially in the area of ethical or

socially responsible consumption, resulting in the “attitude-behavior gap.” This gap exists

because people tend to provide socially desirable answers to attitude research and, thus, attitudes

measured based on self-reporting methods tend to be more positive than actual behavior (King

and Bruner, 2000).

To reduce this gap, De Pelsmacker and his colleagues (2005) suggested that, in order to

effectively evaluate the importance of socially responsible or ethical attitudes in purchase

decision, other measures that are closely related to the actual purchase behavior must be included

in the study. These measures would provide realistic and multi-faceted purchase situations in

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which the respondents will be able to consider other factors in addition to attitudes toward social

responsibility when reporting their purchase intentions. In the literature, many researchers

showed that price, quality, convenience, and brand name are important factors affecting

consumer purchasing decisions (Boulstridge and Carrigan, 2000; Carrigan and Attalla, 20010;

Roberts, 1996; Tallontire et al., 2001).

In the apparel consumption literature, multiple attempts were made to identify important

factors that would influence socially responsible consumption. Shen and Dickson (2001)

evaluated cultural identification, ethnicity, and Machiavellianism on consumers’ acceptance of

unethical clothing consumption behavior. Dickson (2000) investigated the impact of personal

values, beliefs, knowledge, and attitudes on socially responsible apparel purchase intentions.

Hustvedt and Dickson (2009) examined the influence of attitudes and self identity on organic

cotton apparel purchases. However, few studies have investigated the consumer attitude-behavior

relationship after accounting for other product evaluation criteria, especially in socially

responsible consumption.

Consequently, this study examined significant factors influencing consumers’ willingness

to pay for a variety of socially responsible cotton apparel products. More specifically, given that

today’s consumers have different options for socially responsible cotton consumption, the study

investigated the relationships between attitudes and willingness to pay for (a) apparel made out

of organic cotton, (b) apparel made out of cotton produced through sustainable farming practices,

and (c) apparel made out of U.S. grown cotton. In addition, considering that product evaluative

criteria, such as price, quality, convenience, and brand name are important factors influencing

purchase intention, the study examined the relationships between attitude and willingness to pay

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including product evaluative criteria (see Figure 1 for the study’s conceptual model). In sum, this

study investigated the following research questions:

1. What are the attitudinal and product evaluative criteria influencing consumers’

willingness to pay a price premium for apparel products that are made out of organic

cotton (organic cotton apparel hereafter), after accounting for demographic

characteristics?

2. What are the attitudinal and product evaluative criteria influencing consumers’

willingness to pay a price premium for apparel products that are made out of cotton

grown using sustainable farming practices (sustainable cotton apparel hereafter), after

accounting for demographic characteristics?

3. What are the attitudinal and product evaluative criteria influencing consumers’

willingness to pay a price premium for apparel products that are made out of U.S.-

grown cotton (U.S.-grown cotton apparel hereafter), after accounting for demographic

characteristics?

Figure 1 here

Research method

Sample

Nationwide telephone surveys were conducted by a market research firm in order to investigate

consumers’ willingness to pay a price premium for various socially responsible cotton apparel

products. Through random-digit-dialing (RDD), the study’s sample frame was established.

Anyone who was under the age of 21 was not included in the study. Because the objective of this

study was to obtain the purchase intention for cotton shirts, the respondents were screened to

include the primary shopper of the household, regardless of gender or age.

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A total of 500 respondents participated in this study across the nation. Each phone survey

took approximately 15-20 minutes. The majority of the sample (50.2%) was 55 years old or

older. Of the 500 respondents, 79% of the sample was female. Approximately, 59% of the

respondents were married and 81.8% were identified themselves as Caucasian or white. Over

28% of the study samples resided in the mid-Western region and 24.6% declared that their

household’s annual income before taxes was between $25,000 and $55,000. Table 1 displays the

detailed demographic information for the sample.

Table 1 here

Survey instruments

Attitudinal variables. Three attitudinal variable measures developed by Hustvedt and Dickson

(2009) were used in this study as they were shown to be strongly associated with organic cotton

apparel purchase intention. Because Hustvedt and Dickson’s measures were specifically

designed to investigate psychological factors for organic cotton apparel consumption, we have

slightly modified these scales to include those for sustainable and other socially responsible

cotton apparel consumption. First, we added a new item, “I would be willing to pay more for

cotton apparel produced with sustainable farming practices” to a measure of attitudes toward

socially responsible cotton apparel products. Second, we modified these measures from 7-point

Likert-style scales to 5-point Likert style scales (with 1= strongly disagree and 5 = strongly

agree). This change was made to reduce the amount of reading that the phone interviewer would

need to have during the phone survey. In total, 14 questions were asked to measure attitudes

toward socially responsible cotton apparel products (4 items; Cronbach’s alpha =.765), attitudes

toward the environment (5 items; Cronbach’s alpha = .567), and the degree of self-identification

as a socially responsible consumer (5 items; Cronbach’s alpha = .722).

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Product evaluative criterion variables. Although there are many apparel product evaluative

criteria established in the literature, the study focused on the six most commonly discussed

factors in apparel consumption. In addition to price and brand name, in apparel consumption,

color, style, and fit are also important for consumers’ purchase intention (Hsu & Burns, 2002)1

Demographic variables. In order to examine the differences across various groups of consumers,

six demographic variables were included in this study. They were age, gender, race, region,

annual income before taxes, and marital status. Age and income were asked in ranges; however,

the midpoints were used for data analysis and interpretation. All other variables were considered

categorical.

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Laundering (or care) requirements were also added to this study as cotton apparel tends to get

wrinkled significantly and laundering (or care) is an important apparel evaluative criterion. The

respondents were asked to rate the importance (1= not at all important to 5 = very important) on

the question: “when you shop for apparel for yourself and/or your family, how important is

_____ in your decision to buy one item vs. another?” Six apparel evaluative factors were then

presented for the respondents’ ratings.

Willingness to pay. Consumers’ willingness to pay for a premium was measured using three

different sustainable cotton apparel products: (1) an organic cotton shirt, (2) a sustainable cotton

shirt, and (3) a U.S.-grown cotton shirt. The respondents were informed of the definitions of two

terms (organic and sustainable) before answering any questions. The telephone interviewer read

that “organic farming practice refers to a process that does not use chemical pesticides or

chemical fertilizers, and avoids using genetically modified seeds.” The telephone interviewer

1 Consumers’ perceptions of “quality” are ambiguous and hard to define in apparel consumption. They also differ before and after purchase. Some consumers may judge an item’s quality by price and brand before purchase, others by durability and ease of care after purchase (Cotton Incorporated, 2005). Thus, we did not include quality as an apparel evaluative criterion.

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also spelled out that “sustainable farming practice is a process that reduces the use of pesticides,

water, land, and energy compared to conventional farming practices. This process may or may

not use genetically modified seeds.” The respondents were then asked “if you were shopping for

a long-sleeved, button down shirt, made of 100% cotton, for yourself, and it was priced at

$30.00, how much more would you expect to pay for a shirt that was made out of ____?” Then,

the three options, 100% organic cotton, 100% cotton grown using sustainable farming practices,

and 100% U.S. grown cotton, were rotated in the order. For each option, the respondents had an

opportunity to indicate their wiliness to pay for a premium in seven different price brackets

($0.00 or nothing more, $1:00-$3.99, $4:00-$5.99, $6:00-$8.99, $9.00-$10.99, $11.00, and $15-

$20). Midpoints of each price brackets were used and missing vales were replaced with means

for further statistical analyses.

Results and discussion

Overall, more than half of the respondents were willing to pay more for each of the three

different choices of cotton shirts. Over 57% of the respondent stated that they were willing to

pay more for a cotton shirt made out of 100% U.S.-grown cotton. Slightly fewer consumers,

55.1% and 54.9% of the respondents expressed that they were willing to pay more for an organic

or a sustainable cotton shirt, respectively. On average, the respondents were willing to pay the

most, or $5.59, for an organic cotton shirt with the retail price of $30.00, followed by $5.54 for a

sustainable cotton shirt and $5.19 for a cotton shirt made out of 100% U.S.-grown cotton.

In general, the study respondents showed a strong and positive attitude towards the

environment (Mean=4.315; Standard deviation [s.d.] = .620) and identified themselves as

socially responsible consumers (Mean=3.906; s.d. = .765), while expressing a slightly positive

yet neutral attitude toward socially responsible cotton apparel (Mean=3.044; s.d. = 1.105).

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Among the six apparel evaluative factors, fit was the most important factor (Mean= 4.904; s.d. =

.373), followed by price (Mean= 4.607; s.d. = .704), laundering or care requirements (Mean=

4.366; s.d. = 1.087), style (Mean= 4.23; s.d. = 1.017), and color (Mean= 4.124; s.d. = 1.052). The

respondents, however, indicated that brand name is not an important evaluative factor in their

apparel purchase decisions (Mean = 2.587: s.d. = 1.372). Table 2 show the means and standard

deviations of attitudinal variables and apparel evaluative variables included in this study.

Table 2 here

Stepwise regression was conducted on each dependent variable (i.e. willingness to pay a

premium for each option of socially responsible cotton apparel products). Three attitudinal

variables, six apparel evaluative factors, and six demographic variables were used as independent

variables. The results of stepwise regression revealed, first, four statistically significant factors

influencing consumers’ willingness to pay a premium for organic cotton shirts (the study

research question 1). The respondents’ attitudes toward the use of socially responsible cotton

(Standardized β = .359; p-value =.000) and brand name of the cotton shirt (Standardized β =

.081; p-value =.056) had a statistically significant positive impact, while the respondents’ ages

(Standardized β = -.132; p-value =.002) showed a statistically significant negative impact on

consumers’ willingness to pay for organic cotton apparel. In addition, the respondents’ attitudes

towards environment (Standardized β = -.088; p-value =.070) and the price of the cotton shirt

(Standardized β = -.073; p-value =.081) also had statistically significant negative effects. Other

factors were not found statistically significant.

Table 3 here

Second, the results of stepwise regression also showed four statistically significant factors

that affect consumers’ wiliness to pay a premium for sustainable cotton shirts (the study research

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question 2). The respondents’ attitudes toward socially responsible cotton apparel (Standardized

β = .285; p-value =.000) and laundering or care requirements (Standardized β = .089; p-value

=.055) were found to be statistically significant. Gender was also a statistically significant factor;

females showed a greater willingness to pay for sustainable cotton apparel than males

(Standardized β = .111; p-value =.016). Similar to organic cotton shirts, the respondents’

attitudes towards the environment (Standardized β = -.132; p-value =.009) and price

(Standardized β = -.088; p-value =.046) showed statistically significant negative impact on their

willingness to pay for sustainable cotton apparel. Other variables did not show any statistical

significance.

Finally, the stepwise regression results showed three statistically significant factors for

consumers’ willingness to pay a premium for U.S.-grown cotton shirts (the study research

question 3). The respondents’ attitudes towards socially responsible cotton apparel (Standardized

β = 249; p-value =.000) and color (Standardized β = .089; p-value =.041) were found to have a

positive effect on their willingness to pay more for U.S.-grown cotton shirts. In addition, a cotton

shirt’s fit also had a statistically significant positive impact on their willingness to pay

(Standardized β = .072; p-value =.097).

These results showed interesting relationships among consumers’ willingness to pay a

premium for an organic, sustainable, and U.S.-grown cotton shirts, demographic variables,

attitudinal variables, and apparel evaluative factors. In terms of demographic variables, the

findings showed that age and gender were only important factors for willingness to pay a

premium for organic and/or sustainable cotton shirts. The younger consumers were more willing

to pay a premium for organic cottons shirts than the older, while females were more willing to

pay for sustainable cotton shirts than males.

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In terms of consumers’ attitudes, it seemed logical that the stronger attitudes consumers

have toward socially responsible cotton apparel, the more likely they are willing to pay for

organic, sustainable, and U.S.-grown cotton shirts. Interestingly, however, the study showed that

the stronger attitudes the consumers have toward the environment, the less likely they were

willing to pay a premium for organic and sustainable cotton shirts. Perhaps, consumers may

think that if they are truly concerned about the environment, less or non-consumption of apparel

would help protect the environment more effectively than paying a premium for such products.

With regards to apparel evaluative factors, consumers seemed to be willing to pay more

for organic cotton shirts if brand names are a priority in making apparel purchase choices.

Possibly, consumers believe that strong brands, typically with more financial resources, are

better able to develop and offer organic cotton apparel product lines than smaller or lesser known

brands. It is also possible that as organic apparel provides certain messages of self-identity and

belief, consumers are willing to pay more if the brand presents a clear and strong message as

being an organic product.

When all other factors considered, consumers seemed willing to pay more for sustainable

cotton shirts if they think laundering or care requirements are important for their apparel

purchase choices. It is possible that consumers think that fewer launderings or easy care save

energy, water, and other resources and, thus, they seemed to be willing to pay more for easy care

products for the long-term effect. In both cases, however, the amount of a premium that they are

willing to pay decreases as the price of the shirt rises.

For the U.S.-grown cotton shirts, color and fit were important apparel evaluative factors

for consumers’ willingness to pay a premium. That is, the more weight consumers put on color

and fit for their apparel purchase choices, the more they were willing to pay a premium for U.S.-

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grown cotton shirts. Perhaps, consumers see color and fit as a proxy for high quality for cotton

apparel products when other information is not available. Thus, when they encounter shirts with

100% U.S.-grown cotton fibers, they may assume that the products are made in the United States

and, thus, the shirts would offer high quality, particularly color and fit. Thus, if color and fit are

important for their apparel purchase choices, they may be willing to pay more for U.S.-grown

cotton shirts.

Conclusions

Today’s consumers want to do more for society and the natural environment through the

consumption process than simply meeting their immediate needs. Businesses now have no

choice but to understand what consumers want in terms of social responsibility and offer such

products and services to satisfy their consumers, while gaining and maintaining economic

profits. Specifically focusing on cotton shirts, this study investigated significant factors

influencing consumers’ willingness to pay for three different socially responsible products—

organic cotton apparel, sustainable cotton apparel, and U.S.-grown cotton apparel.

The study results from the national telephone surveys showed that more than half of the

respondents indicated that they were willing to pay more for organic, sustainable, and U.S.-

grown cotton shirts. On average, the respondents were willing to pay an additional $5.00 or more

for these cotton shirts at the $30.00 retail value. For all three of the cotton shirt options,

consumers were willing to pay more (less) when they have stronger (weaker) attitudes toward

socially responsible cotton apparel. For the organic and sustainable cotton shirts only, consumers

were willing to pay more (less) as they have stronger (weaker) attitudes towards the environment

while their willingness to pay seemed to decrease as the shirt’s price increases.

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More specifically, the findings showed that consumers were willing to pay more (less)

for organic cotton shirts if they put a greater (less) emphasis on brand. The younger consumers

were willing to pay more for organic cottons shirts than the older. Consumers who look for

simpler laundering or care requirements on apparel and female consumers indicated that they

were willing to pay more for sustainable cotton shirts. Finally, consumers who emphasize color

and fit when evaluating apparel products suggested that they were willing to pay more for U.S.-

grown cotton shirts.

The study findings have several important contributions and implications. The study

showed the relationships among attitudes, product evaluative criteria, demographic

characteristics, and willingness to pay a premium for three different options of socially

responsible cotton apparel, in order to help better describe the attitude and behavior gap in

consumer research. Indeed, the study findings suggested that some attitudes impact consumers’

willingness to pay for socially responsible products, while others do not, even when other factors

were considered. In this study, consumers’ attitudes toward socially responsible cotton apparel

had a positive impact on willingness to pay a premium for all three choices, while attitudes

towards the environment had negative impact on willingness to pay a premium for organic and

sustainable cotton shirts. Self-identity in socially responsible consumption, however, did not

show a significant effect on consumers’ willingness to pay a premium for any of the three

socially responsible cotton apparel choices. These findings suggest that certain attitudes, such as

consumers’ attitudes toward socially responsible cotton apparel in this study, are still more

important in consumers’ willingness to pay than demographic characteristics or product

evaluative criteria. Other attitudes, such as self-identity in socially responsible consumption, no

22

longer become important when demographic characteristics and product evaluative criteria are

considered.

Second, the study showed that over half of today’s consumers are willing to pay a

premium for various socially responsible apparel products (over $5.00 for a shirt with the $30.00

retail value). This is good news for apparel businesses seeking additional sales and profit

sources; however, how to approach consumers to justify a premium price is another question.

The study findings showed several interesting aspects of consumers’ willingness to pay a

premium for these products. Consumers who are more concerned about the natural and/or local

environment do not seem to be willing to pay more for organic and sustainable cotton shirts.

Furthermore, consumers who identify themselves as socially responsible consumers showed little

interest in organic, sustainable, and U.S.-grown cotton shirts, in terms of willingness to pay a

premium. Therefore, apparel businesses planning to offer such products may want to provide

other tangible benefits, such as strong brand, reasonable price, easy care, color choice, and fit, in

addition to promotional campaigns appealing to moral issues.

Finally, the study results showed that only age and gender were important demographic

characteristics influencing consumers’ willingness to pay a premium for organic and sustainable

cotton shirts. Thus, apparel businesses should carefully choose the right age and gender to

maximize profits and sales, depending on the type of socially responsible product choices. For

example, organic apparel would be more appealing to the younger group and sustainable apparel

for female consumers.

Despite these contributions and implications, the study bears some limitations and, thus,

it offers future research opportunities. First, although the phone survey has been considered one

of the best survey modes for general population surveys due to its high coverage, ability to

23

randomly sample through RDD, and great response rates (Dilmman, Smyth, and Christian,

2009), today, the widespread usage of the cellular phone has significantly reduced the coverage

rates of traditional phone surveys. One estimate shows that approximately 18% of the U.S. adult

population is missed by traditional RDD sampling (Dillman et al., 2009). Thus, the extrapolation

of the study findings to a greater population must be done with caution. Second, because the

responses were collected through telephone conversations, it is possible that the respondents

might have provided more socially desirable responses than self-administered survey modes. To

help alleviate these issues, further research is recommended using different survey modes, such

as online, mail, and/or mixed.

Second, when responding to surveys, the information of three choices of socially

responsible cotton shirts were given verbally, leaving the product attributes constructed by the

respondents by themselves. Although we tried to be as specific as possible, it is probable that

each respondent may have had different product attributes and characteristics in mind, depending

on his or her past experience with such products. Thus, more studies would be helpful if the three

product choices of socially responsible apparel were visually and/or viscerally presented to the

respondents in real-life shopping situations, both on- and off-line. The results would help reduce

the attitudes-behavior gap.

Third, in addition to the variables and factors used in this study, further examination of

consumers’ willingness to pay research using other demographic, attitudinal, and product

evaluative variables would help deepen our understanding of consumers’ willingness to pay and

other factors that are concurrently considered during purchase. Finally, this study used a cotton

shirt at the $30.00 retail value as a product. Although we believe that it is a commonly used

apparel product that most consumers have purchased at least once in their lives, it could mean

24

different things to different people. Thus, future research using different product items is

recommended to advance consumers’ willingness to pay research.

25

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29

Figure 1. Research Conceptual Model

Willingness to Pay

Organic cotton shirts

Sustainable cotton shirts

U.S.-grown cotton shirts

Attitudes toward socially responsible

cotton apparel

Demographic characteristics

Apparel product evaluative criterion

30

Table 1. Sample Characteristics

Description

Frequency

Percentage

Age

21-34 35-44 45-49 50-54 55-59 60-64

65 and over Refused

54 60 45 90 75 44

124 8

10.8% 12.0% 9.0%

18.0% 15.0% 8.8%

24.8% 1.6%

Gender

Male

Female 105

395 21.0%

79.0% Primary shopper

Yes No

500

0

100.0%

0.0% Marital status

Single, that is never married

Married Widowed Divorced Separated

Refused

69

295 63 58 7 8

13.8% 59.0% 12.6% 11.6% 1.4% 1.6%

Race Caucasian/While

Black Hispanic

Asian American Indian

Other Refused

409 36 15 5

10 12 13

81.8% 7.2% 3.0% 1.0% 2.0% 2.4% 2.6%

Region

North

Northeast Mid-Atlantic

Southeast Deep South

Mid-West Northwest Southwest

30 87 22 60 52

142 51 56

6.0%

17.4% 4.4%

12.0% 10.4% 28.4% 10.2% 11.2%

Household Income Under $25,000

$25,000 to $55,000 $55,000 to $75,000

$75,000 to $100,000 $100,000 to $150,000

Over $150,000 Refused

68 83 60 52 35 24

138

13.6% 24.6% 12.2% 10.4% 7.0% 4.8%

27.6%

Total 500 100%

31

Table 2. Descriptive statistics for non-categorical variables included in the study

Variables

Sample size (N)

Mean

Standard Deviation

Attitudes toward socially responsible cotton apparel Psychographic variables1

Attitudes toward environment Self-identity as a socially responsible consumer

Fit Apparel product evaluative factors1

Price Laundering (or care) requirements Style Color Brand

Organic cotton apparel Willingness to pay (in dollars) for:

Sustainable cotton apparel U.S. grown cotton apparel

500 500 500

500 499 498 499 500 499

460 478 471

3.044 4.315 3.906

4.904 4.607 4.366 4.227 4.124 2.587

5.589 5.537 5.187

1.105 .620 .765

.373

.703 1.087 1.017 1.052 1.372

5.593 5.916 5.425

Note. 11 = strongly disagree and 5 = strongly agree.

32

Table 3. Stepwise regression results on factors influencing consumers’ willingness to pay

for three different socially responsible cotton apparel choices

Variables

Standardized β Coefficients

Adjusted R2

t-value

p-value

Attitudes toward socially responsible cotton apparel Organic cotton apparel

Age Attitudes toward environment Brand Price

Attitudes toward socially responsible cotton apparel Sustainable cotton apparel

Gender (male=1; female=2) Attitudes toward environment Price Laundering (or care) requirement

Attitudes toward socially responsible cotton apparel U.S. grown cotton apparel

Color Fit

.359 -.132 -.088 .081

-.073

.285

.111 -.132 -.088 .089

.249

.089

.072

.108

.123

.128

.132

.136

.053

.064

.076

.079

.084

.062

.070

.073

7.344 -3.155 -1.815 1.912

-1.748

5.678 2.418

-2.642 -2.004 1.923

5.766 2.045 1.661

.000

.002

.070

.056

.081

.000

.016

.009

.046

.055

.000

.041

.097