Are ethical consumption and charitable giving substitutes or not? Insights into consumers’ coffee choice

While charitable giving stagnates, Fair Trade and organic labelling as well as Cause-related Marketing campaigns are on the rise in Germany. The question as to whether the efficiency of the different systems is of relevance for consumers has received little attention in the literature so far. A latent class model for discrete choice analysis reveals five consumer segments with well distinguished preferences and willingness to pay measures for the modes of ethical consumption as well as for different donation amounts. For 27% of the 484 respondents ethical consumption occurs at the expense of other forms of ethical behaviour such as charitable giving.

Research highlights
► Consumers’ preferences for ethical consumption and charitable giving are assessed.
► Five consumer segments with statistically well defined preferences are distinguished.
► Segment membership is mostly determined by attitudes and price.
► Willingness to pay differs significantly between labelling schemes.
► Systems efficiency is important for consumers.