Willingness-to-Pay for “Sustainable” Fashion: The Effects of Information Open Access

Abstract

This study investigates the impact of consumer education on the willingness-to-pay for fast fashion ecolabeled as sustainable fashion. Utilizing two rounds of an nth price auction through a within-subjects design, the study tracks the difference between bids for fashion items with an ecolabel before and after undergraduate participants are informed of the misleading nature of ecolabels. Subjects’ attitudes towards sustainability were also measured on two parameters to evaluate if more positive attitudes towards sustainability predict a lower willingness-to-pay across rounds. Results show that subjects bid a lower amount for the fashion item after reading the educational article on ecolabels, however, there are no significant relationships between learning about ecolabels and higher sustainability scores with willingness-to-pay. This may be the result of several contributing factors, including but not limited to the hypothetical nature of the design, selection bias in participants noticing the ecolabel, and other sample characteristics.

Table of Contents

1 Introduction ………………………………………………………………………………………………………………..1

2 Literature Review ………………………………………………………………………………………………………..5

2.1 Sustainability and Economics …………………………………………………………………………5

2.2 A Short History of Fast Fashion ………………………………………………………………………6

2.3 Greenwashing Through the Use of Ecolabels …………………………………………………...7

2.4 The Sustainable Consumer ……………………………………………………………………………..9

3 Experimental Design …………………………………………………………………………………………………10

3.1 Setting and Recruitment ………………………………………………………………………………10

3.2 Pre-Experiment ……………………………………………………………………………………………11

3.3 Nth Price Auction ………………………………………………….......................................................13

3.4 Materials ……………………………………………………………………………………………………..15

3.5 Post-Experiment ………………………………………………………………………………………….18

4 Results ……………………………………………………………………………………………………………………...21

4.1 Understanding the Sample ……………………………………………………………………………21

4.2 Distribution of Bids ……………………………………………………………………………………...24

4.3 Determinants of Willingness-to-Pay …………………………………………............................25

4.4 Determinants of Sustainability and Consumer Consciousness Scores……………...28

5 Discussion ………………………………………………………………………………………………………………...30

5.1 Strengths ………………………………………………………………………………………………..……31

5.2 Limitations ……………………………………………………………………………………....................33

5.3 Sample Characteristics ………………………………………….......................................................35

5.3.1 Sampling Method and Size …………………………………........................................35

5.3.2 Education ……………………….…………………………………........................................36

5.3.3 Diversity ………………………...…………………………………........................................36

5.3.4 Age ………………………...…………………………………...................................................37

5.4 Experimental Design …………………………………………………………………….……………...37

5.5 Future Directions …………………………………………………………………………………………38

5.6 Conclusion …………………………………………………………………………………………………..39

References ………………………………………………………………………………………………………………......42

Appendices ……………………………………………………………………………………………………………….....47

About this Honors Thesis

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School	Emory College
Department	Economics
Degree	B.A.
Submission	Honors Thesis
Language	English
Research Field	Economics, General Sustainability
Keyword	ecolabel fast fashion sustainability willingness-to-pay nth price auction
Committee Chair / Thesis Advisor	Kelli Lanier, Emory University
Committee Members	Sara Valencia Botto, Emory University Shomu Banerjee, Emory University

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