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Households' Willingness to Pay for “Green” Goods: Evidence from Patagonia's Introduction of Organic Cotton Sportswear
Author(s) -
CasadesusMasanell Ramon,
Crooke Michael,
Reinhardt Forest,
Vasishth Vishal
Publication year - 2009
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/j.1530-9134.2009.00212.x
Subject(s) - casual , clothing , willingness to pay , business , agricultural economics , commerce , economics , geography , microeconomics , materials science , archaeology , composite material
To shed light on individuals' willingness to pay for “green” goods (i.e., goods that are supposed to have lower adverse environmental impacts either in production or in use), we study data from the introduction by Patagonia, Inc., of organic cotton sportswear in the mid‐1990s. Patagonia, a maker of high‐end outdoor wear, substituted organic cotton for conventionally grown cotton in all of its sportswear (i.e., casual clothing for travel and leisure) in 1996. We find that customers were willing to pay significant premiums for organic cotton garments although the organic cotton provided no demonstrable private incremental benefits to the customer.