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Want to be socially responsible? It will cost you

Most of us say we would pay more for products we feel good about, according to a new study. And the items we're willing to pay the biggest premiums on are the ones we throw away.

By Mitch Lipka Aug 7, 2013 11:19AM

Grocery shopping (© Randy Faris/Corbis)Consumers are willing to pay more to buy "socially responsible products," especially those that we use a lot of -- like toilet paper, according to a study just released by NYU's Stern School of Business.


Companies appear to be betting that's the case. Whether marketing for a cause, selling more environmentally friendly products or certifying that a product was produced in a humane fashion, companies are embracing the trend.


The Stern study by Professor Russ Winer, chairman of the school's marketing department, and a Ph.D. candidate found that 60% of consumers would pay more for a product that was linked to having environmental or social benefits.


Are you in that group? And, if so, how much more would you pay?


According to the study, consumers wouldn't exactly go overboard to buy fair trade coffee or humanely tested cosmetics. On average, the NYU folks found we'd be willing to fork over an extra 17% to buy a product that was considered to be socially responsible.


But consumers are willing to pay an even higher premium when it comes to products we dispose of -- recycled paper towels, for example. When it comes to so-called durable goods, consumers aren't as willing to pay extra, the study found.


And what product claims were the most likely to get consumers to pay the most extra? Those that indicated goodwill to people, such as those that say they support treating workers fairly. After that, consumers would pay more to get products that claimed to treat animals well, like those that indicate humane treatment, such as not having a cage.

Who's the winner here? Companies. If they weren't already aware that consumers would pay more to get products that make these sorts of claims -- particularly for the stuff we toss away anyhow -- they are now.

 

"This is good news for marketers and retailers who work with socially responsible products – particularly nondurable goods like paper towels," Winer said. "Our study shows that retailers can obtain larger price premiums for frequently purchased, nondurable goods that are socially responsible than for durable products."


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17Comments
Aug 7, 2013 4:12PM
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I am constantly asked at the Dollar Store, "do you want to donate your change to.....?"  My answer is "no, the government makes me donate too much to them."  And, I am not joking!  I wish I were.
Aug 7, 2013 3:56PM
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Same type of people who buy expensive plug-in electric cars - - "eco-martyrs".
Aug 7, 2013 7:14PM
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I think the much better business model is to be both cost competitive and environmentally friendly/socially reponsible.  I'll gladly buy organic if its the same price as the comparable option, but no way would I pay much of a premium.  Just like I prefer to do most my grocery shopping at the employee owned chain, but I still shop the sales at the rest of the stores, too...
Aug 7, 2013 7:13PM
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I wonder if Cheryl Crow uses paper towels made out of recycled Asian toilet paper?
Aug 7, 2013 5:03PM
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I made a DYI water filter for about $20. Now I filter my tap water, save money and get better water than bottled water.

Besides that bottled water can cause cancer from the chemicals leeching from the bottle. Also, those bottles are non-recyclable and have to go to a landfill or wind up as litter. What a waste.

Wait until you pay $4/gallon for water. Want to invest? Invest in water.
Aug 8, 2013 9:45AM
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We do not necessarily seek out 'green' products, or products that are more socially responsible, but we purchase them from time to time.  We do, however, actively examine the country of origin for products and will buy products  that are made in America first.  We have often not purchased products, particularly produce, when no American option was available.
Aug 8, 2013 7:10AM
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"Who's the winner here? Companies. If they weren't already aware that consumers would pay more to get products that make these sorts of claims -- particularly for the stuff we toss away anyhow -- they are now."
Aug 7, 2013 8:40PM
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I'm not willing to pay more for 'green products'. The way to go is to recycle EVERY THING possible. The more paper recycled by consumers, the more green product will be made. The goal is to make 'NEW' paper products more expensive to make. 

Aug 7, 2013 4:08PM
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someone was drinking when they wrote this. people are not buying more responsible items. they are buying what they need and can afford these days. the ones buying the "green" products are the ones on welfare and spending other peoples money  
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