Pat Auger
Paul Burke
What Will Consumers Pay
for Social Product Features?
ABSTRACT. The importance of ethical consumerism
to many companies worldwide has increased dramat-
ically in recent years. Ethical consumerism encom-
passes the importance of non-traditional and social
components of a company’s products and business
process to strategic success – such as environmental
protectionism, child labor practices and so on. The
present paper utilizes a random utility theoretic exper-
imental design to provide estimates of the relative
value selected consumers place on the social features
of products.
KEY WORDS: animal rights, choice modeling,
ethical consumerism, willingness-to-pay, workers’
rights
Recent studies on ethical consumerism suggest
that consumers increasingly care about the
ethical components of products and business
processes and that these concerns have financial
implications for the businesses involved (CAFOD,
1998; Elliot and Freeman, 2001; Marymount
University, 1999). However, the conclusions from
most of these studies were derived from surveys
in which respondents were asked to simply rank
the importance of a list of ethical issues. Such
questions do not require consumers to trade-off
ethical features of products against traditional
features nor do they seek to determine the degree
Pat Auger is Senior Fellow at the Melbourne Business
School.
Paul Burke is a PhD candidate.
Timothy Devinney is Professor and Director of the Centre
for Corporate Change at the Australian Graduate School
of Management.
Jordan Louviere is Professor of Marketing at the University
of Technology, Sydney.
Journal of Business Ethics 42: 281–304, 2003.
© 2003 Kluwer Academic Publishers. Printed in the Netherlands.
Timothy M. Devinney
Jordan J. Louviere
to which consumers would sacrifice to make
these tradeoffs. Hence, responses to these types
of survey questions tend to overstate the impor-
tance of ethical features because there are obvious
responses that are more socially acceptable and
there is little ability to estimate the magnitude
of the importance of the stated opinion (what
statisticians call “effect size”).
Despite such methodological problems, recent
developments suggest that there is a trend towards
more consumer activism with respect to the
“social behaviors” of organizations, especially
large and well-known multinational corporations.
For example, the number of protests directed at
international organizations like the WTO and
at global companies like Nike has increased
dramatically in recent years. Demonstrators have
often become the main focus of news reports
during large-scale meetings such as the WTO,
G7 and the World Bank; and the number of
groups focusing their attention on the social
behaviors of companies also seems to have
increased in recent years. For example, Elliott
and Freeman (2001) identified over forty anti-
sweatshop organizations in the U.S. alone, a
large number considering the focus of those
organizations on a single issue. Even larger
numbers of groups and members can be found
in areas such as environmental protectionism,
human rights, and animal rights with large and
well-established organizations like Greenpeace,
Amnesty International and the World Wildlife
Fund.
The purpose of this paper is to try to clarify
the extent to which consumers “value” ethical
product features when making purchases by
utilizing a distinctive methodology – structured
choice experiments (Louviere et al., 2000) – that
282 Pat Auger et al.
allows us to estimate the dollar value of specific
product configurations without the standard
“politically correct” bias that exists with tradi-
tional survey methods. In addition, we are
concerned not just with whether there are indi-
viduals in the community who value social
product features but whether or not we can accu-
rately gauge who these people are and whether
information presentation might cause their pref-
erences to vary.
Our purpose is not to definitively determine
whether ethical consumerism is or is not a vital
force in the economy but to address the more
subtle issue associated with whether or not con-
sumers are little more than “arm chair” ethicists.
This has value both to policy makers and
business. In the case of the latter, it is important
for political decision makers to judge the extent
to which vocal advocacy for social causes is
representative of a more deep seeded and latent
concern upon which people are willing to act,
if given the opportunity. In the case of the
former, business needs to have accurate infor-
mation about what its consumers truly want as
represented by what they will pay for and need
to know whether what consumers state currently
is representative of what they truly believe.
The importance of ethical consumerism
The rising importance of ethical management
dimensions is easy to observe in the popular
press. The travails of corporate giants such as
Nike and Adidas can be juxtaposed against very
visible “corporate responsibility” stances of com-
panies like The Body Shop, Levi’s and Reebok.
Nike’s labor practice problems in Indonesia and
Vietnam so vividly highlighted by the CBS
program 48 Hours a few years ago (17 October
1996) revealed either seemingly poor manage-
rial control or very poor public relations. Indeed,
recent revelations about the intimidation of Nike
factory workers in Indonesia suggest that these
problems persist in some locations (Luh, 2001).
Similarly, Kathie Lee Gifford’s “squeaky clean”
image suffered after repeated stories showing her
clothing (retailed at K-Mart) being made in sweat
shops (Miller, 1997).
A more cynical view on such issues would
point out that much of what appears on the
surface as moral corporate behavior is really
subtle marketing and/or attempts by organized
labor groups in developed countries to ensure
that jobs do not shift to lower wage countries
overseas (Elliott and Freeman, 2001). For
example, it is difficult to distinguish a morally
“responsible” stance, such as the labels on
Reebok’s soccer balls (“Guarantee: Manufactured
without child labor”, Miller, 1997), from a
sophisticated strategy aimed at differentiation,
such as Reebok’s visible support of Amnesty
International. The latter presumably plays against
Nike (and its labor problems) and Adidas (which
has been accused of using prison labor in China
(Smith and Copetas, 1998)). In fact, although
Reebok’s Director of Human Rights, Doug
Cahn, stated that “there’s a correlation between
factories producing good quality products and
those with good working conditions” (Click,
1996), Reebok does not seem to have a cost or
quality advantage over its less “responsible” com-
petitors. Indeed, until recently Nike consistently
outperformed Reebok on both quality and finan-
cial performance measures. Lerner and Fryxell
(1988) show that the only consistent factors
related to measures of “corporate social perfor-
mance” are the industry in which one operates,
one’s size and one’s advertising intensity (the
latter two must be large).
Gordon Fairclough (1996) noted there is little
that is “black and white” about the child labor
dilemma. Those who tout sanctions and boycotts
to deal with the problem do little more than
“assuage the consciences of Western consumers”
because nothing replaces these children’s work
except destitution. Thus, a guarantee that a
soccer ball is not made by child labor does not
necessarily mean better welfare for children who
could have made the soccer ball if they are
excluded from the opportunity to make even a
limited wage. Neil Hawkins of CARE Cambodia
summed up some of these difficult issues by
saying “I don’t believe that the people who buy
Gap and Nike want these girls to work in
brothels because they lost their jobs at the
garment factory” (AsiaWeek, 2001). Similarly,
consumer boycotts and associated tactics create
 What Will Consumers Pay for Social Product Features?
their own moral dilemma in a society where free
choice is viewed as the most paramount of
human rights (Garrett, 1986). Furthermore,
several researchers have shown that trade sanc-
tions or import tariffs against countries that use
child labor do not always reduce the use of child
labor in those countries (e.g., Ranjan, 2001). In
fact, Edmonds and Pavcnik (2002) recently
showed that globalization (or an elimination of
sanctions and/or tariffs) has reduced the use of
child labor in Vietnam, especially for older
female children. An equally important finding
was that the percentage of children attending
school significantly increased over the same
period, which suggests that children who had left
the workforce were now attending schools.
The emotional level of such discussions clearly
can make rational discourse difficult, but in light
of the apparent importance of the issue, it is sur-
prising how little substantive academic research
is available, and what is available about the
importance of ethical consumerism is both mixed
and thin. At the most basic of levels two ques-
tions need to be considered and are the subject
of this paper:
(1) When forced to make substantive trade-
offs, do we find that consumers value
ethical product features to any great
extent? And, if this is true,
(2) Can we make any statements regarding
differences between observable groups of
consumers in the extent to which they
hold such a disposition?
There is considerable evidence to suggest that
ethical consumer segments indeed exist as dis-
tinctive groups. In general, the ethics literature
has shown that consumers indicate that they
value moral stances. For example, Fullerton et al.
(1996) showed that consumers generally are quite
intolerant with regard to ethical abuses by both
retailers (e.g., cheating customers) and consumers
(e.g., abusing the goodwill of retailers). Whalen
et al. (1991) and Pitts et al. (1991) studied the
relationship between situational variables and
subjects’ ethical predispositions and purchase
intentions and their evaluations of a store’s
managers. They base their work on the simple
finding that consumers will “avoid transactions
283
with dishonest, unethical sellers” (Abratt and
Sacks, 1988), and show that consumers arrive at
this decision differently depending on the situa-
tion. In circumstances where consumers faced a
personal ethical transgression, their cognitive
schema were simpler and more likely to be
related to their ethical predisposition (although
weakly). In vicarious situations in which ethical
transgressions are more general and less direct,
more complex cognitive schema exist with
less direct linkage to consumers’ ethical predis-
position.
More typical are attempts to understand ethical
consumers using multiple item scales. For
example, Roberts (1996) developed an 18-item
scale measuring “responsible consumer behavior”
that included measures like “I have purchased
products because they cause less pollution” and
“I do not buy products from companies that dis-
criminate against minorities”. Three important
results emerge from his work: (a) non-ethical
consumers exist (39 percent of respondents indi-
cated no ethical concerns); (b) very little of the
variance on his scale is related to demographic
variables; and (c) the relationship between
expressed environmental and social concern and
active consumer action is weak. This latter result
is significant for two reasons. First, it relates
directly to our primary research question, namely
are people willing to act, at a cost, based upon
an ethical consumer disposition? Second, it is not
entirely consistent with previous research in the
field of moral judgment, and more importantly,
the link between moral judgment and observed
behavior (e.g., Rest, 1986; Rest et al., 1997;
Thoma et al., 1986). More specifically, Rest
(1983, 1984) proposed that moral judgment is
one of four component internal processes that
determine moral behavior and that moral
behavior is codetermined by these four internal
processes. Two implications result from this
theory: (1) there should be a significant link
between moral judgment and moral behavior,
and (2) the link between moral judgment and
moral behavior may be weak since the other
three components also codetermine moral
behavior. Empirical evidence to date seems to
support this theory. For example, Thoma et al.
(1986) found that 32 out of 47 analyses (from a
284 Pat Auger et al.
number of different studies) showed a significant
link between moral judgment and behavior.
More recently, Rest et al. (1999) cite over 60
published articles that uncovered a relationship
between moral judgment and behavior.
Studies that examined the importance of
ethical consumerism, our main question, fall into
two categories: those identifying and measuring
the strength of consumer preferences and the
analysis of factors that influence adoption of
socially responsible products. Virtually all such
research to date has been related to environ-
mentalism or “green” consumers. For example,
Sriram and Forman (1993) examined the strength
of consumer preferences using conjoint analysis.
They studied milk, washing machines and
deodorant using Dutch and American respon-
dents, and varied socially responsible features
like recyclable packaging (milk), energy effi-
ciency (washing machines) and animal testing
(deodorant). They found that energy efficiency
was not important to either group, but American
consumers were more concerned about milk in
recyclable packages than Dutch consumers, who
wanted cheap, low fat milk in non-plastic con-
tainers. Both groups showed concern towards
testing of deodorants on animals. Schrum et al.
(1995) investigated the associated advertising
strategy to green consumers, who were more
likely to be opinion leaders, knowledgeable
information seekers and careful shoppers. They
found that only consumers who were active
information seekers would switch from their
current brand to a less effective but environ-
mentally safer brand.
More recent studies have attempted to deal
with the willingness of consumers to pay more
for products with “acceptable ethical features”,
especially with respect to labor standards.
For example, several studies conducted at
Marymount University (1999) found that 75
percent of consumers would avoid shopping in
a store if they knew the goods were produced
under bad conditions. More importantly, these
same consumers indicated that they would pay
$1 more for a $20 item that was made under
good conditions. Similar results were obtained
from University of Maryland studies (2000) in
which roughly 75 percent of consumers said they
would pay $5 more on a $20 item if they knew
it was not fabricated in a sweatshop.
A more rigorous study by Elliott and Freeman
(2001) produced some additional insights into the
behavior of consumers. First, the authors found
that consumers were willing to pay more for
products made under good conditions, but that
the price of the products affected how much
more. For example, their results indicate that
consumers were willing to pay 28 percent more
for $10 items, but 15 percent more for $100
items. Further investigations led to some inter-
esting generalizations. The authors found rela-
tively high elasticities of demand for products
made under good conditions but low elasticities
for products made under bad conditions. These
results support the anecdotal evidence presented
earlier. That is, companies can potentially lose
from having their products identified as being
made under bad conditions but have little to gain
from marketing their products as being made
under good conditions. These results are sup-
ported by Folkes and Kamins (1999) who found
that the attitudes of consumers towards an
organization were affected more by unethical
behavior than by prosocial behavior; that is,
prosocial behavior did not compensate for an
inferior product, but unethical behavior had a
significant impact on attitudes even when the
product had superior features.
Osterhus (1997) and Bhate and Lawler (1997)
examined factors affecting adoption of socially
responsible products. Bhate and Lawler found
that innovators were more likely to be environ-
mentally friendly consumers than adapters.
Osterhus studied the influence of seven key con-
structs (personal cost, personal benefit, personal
norms, social norms, attribution of responsibility,
awareness of consequences, and trust), and devel-
oped a model that blended normative, structural
and economic factors to determine pro-social
consumer behavior. His three major findings
were as follows: (1) normative influences do not
automatically translate into behavior (consistent
with Roberts, 1996), (2) people are strongly
influenced by personal costs and rewards, and (3)
personal norms matter, but interact with respon-
sibility and trust.
Our review of prior research uncovered a
 What Will Consumers Pay for Social Product Features?
number of gaps in the literature. First, the liter-
ature suggests that there are consistent indications
that, on some criteria, segments of consumers
exist where ethical attributes are valued; or at
least we cannot reject the hypothesis that they
exist. However, the characteristics of the con-
sumers who make up those segments are not
nearly as clear. In other words, we know that
ethical consumers exist but we don’t know who
those consumers are. Moreover, the limited
research on the characteristics of ethical con-
sumers suggests that demographics are not good
predictors of ethical consumerism (e.g., Roberts,
1996). Second, evidence for the importance of
ethical or social components of products is less
clear. Recent studies (e.g., Elliott and Freeman,
2001) have attempted to quantify the dollar value
of these consumer preferences but we know that
the measurement of simple, unconstrained stated
preferences will overestimate the importance of
product features for which there are obvious,
socially correct, responses. Indeed work in
random utility theory indicates that this will
almost always be true since response variability
is lower in surveys than would be exhibited in
the real world. Clearly more rigorous experi-
mental methodology is required. Furthermore,
these studies have usually concentrated on a
single ethical attribute (e.g., working conditions
for Elliott and Freeman, 2001) whereas products
often incorporate a number of ethical attributes
(Crane, 2001). Hence, an expansion of the
number of ethical attributes within a single study
(and product category) and a determination of
their relative importance to consumers using
rigorous experimental methodology fills impor-
tant gaps in the literature on ethical con-
sumerism.
Research approach
Our research approach involves designing and
implementing a two-stage experiment that
requires two survey instruments. The two instru-
ments are an ethical disposition survey (EDS) and
a choice experiment (Louviere et al., 2000). The
EDS contained 20 Machiavellianism questions
from the MACH IV Machiavellianism scale of
285
Christie and Geis (1970). The choice experiment
contained eight experimental conditions plus
two control conditions. The eight experimental
conditions included all attributes in the hypo-
thetical product profiles (i.e., both functional
and ethical attributes) and involved an overar-
ching experiment in which subjects were
supplied with a professionally designed news
article about ethical factors related to the pro-
duction of the products used in the choice
experiment, bar soaps or athletic shoes (see
Appendix A). The control conditions did not
include any of the ethical attributes in the
choice experiment profiles. Subjects in the
control conditions received either “full” infor-
mation (control 1) about all ethical factors
(described later), or no information (control 2)
about ethical factors. Subjects were also randomly
assigned to one of three conditions whereby two
groups of subjects received both a choice exper-
iment and an EDS survey, and the third group
got the choice experiment only. For those
subjects receiving both surveys half saw the EDS
survey first and half received the choice experi-
ment first.
The surveys were administered to three groups
of subjects: MBA students at an Australian uni-
versity, undergraduate students at a Hong Kong
university (see Calder et al., 1981, 1982 for a dis-
cussion of the validity of the use of students in
experiments), and supporters of the human rights
organization Amnesty International (in Australia).
We chose those three groups deliberately in order
to maximize the effect size. That is, we were
interested in trying to see how large the overall
range of effects of ethical attributes might be
rather that trying to estimate the effects in the
population per se. As an incentive to participate,
the student subjects were given an opportunity
to enter a lottery with total prizes of A$500 (in
Australia) and $HK4000 (in Hong Kong). The
Amnesty International supporters had A$5
donated to Amnesty International for each set
of surveys completed. The Hong Kong surveys
were translated into Chinese and back-translated
to ensure consistency. The sample is deliberately
non-representative of the society but was chosen
to provide a widest range of attitudes toward
ethical products – from more conservative MBAs,
286
to status conscious young students, to self-
revealed supporters of social causes.
The choice experiment survey required
respondents to: (1) evaluate their most recently
purchased brand, (2) decide whether to consider
and purchase 32 hypothetical bath soap or
athletic shoe products, and (3) answer a series of
socio-demographic questions. Bar soaps and
athletic shoes were used because of familiarity
and relevance to specific ethical issues, namely
Product features and ethical attributes used in the experiment
Athletic Shoes
Basic product features:
Shock absorption/cushioning (LOW or HIGH)
Weight (LIGHTER or HEAVIER)
Ankle support (LOW CUT or HIGH CUT)
Sole durability (SHORT or LONG)
Breathability/ventilation (LOW or HIGH)
Fabrication Materials (SYNTHETIC or LEATHER)
Reflectivity at night (NO or YES)
Comfort/fit (LOW or HIGH)
Brand of shoe (Nike, Adidas, Reebok, or Others:
New Balance, Converse, Brooks, Fila,
Puma, Etonic, Asics, Saucony)
Price ($40, $70, $100, $130) – in Australia
Price ($300, $550, $800, $1,050) – in HK
Ethical features:
Is child labour used in making the product?
(NO or YES)
Are workers paid above minimum wage?
(NO or YES)
Are workers’ working conditions dangerous?
(NO or YES)
Are workers’ living conditions at the factory
acceptable? (NO or YES)
Note: Two level items coded as –1 and +1. The first item (e.g., NO) is coded –1 and the second (e.g., YES)
is coded +1.
Pat Auger et al.
environmentalism, labor and animal rights, and
to encompass high involvement and low involve-
ment product purchases. Subjects were randomly
assigned either to bar soap or athletic shoe
surveys. The functional and ethical product
attributes for both products are shown in Table
I. The functional product attributes were pre-
tested to ensure their relevance to consumer
purchase decisions and price levels were consis-
tent with current prices in both markets. We
TABLE I
00000000000000000000Soap
Shape (ROUNDED or SQUARE)
Natural ingredients (NO or YES)
Scented (NO or YES)
Artificial colors (NO or YES)
Moisturizer (NO or YES)
Anti-bacterial protection (NO or YES)
Will it clog your pores? (NO or YES)
Will it worsen your acne? (NO or YES)
Brand name (MAJOR MULTI-NATIONAL or
LOCAL BRAND)
Price ($2.25, $1.65, $1.05, $0.45) – in Australia
Price ($6, $9, $12, $15) – in HK
Biodegradable formulation? (NO or YES)
Tested on animals? (NO or YES)
Animal by-products used as ingredients?
(NO or YES)
 What Will Consumers Pay for Social Product Features? 287

chose ethical product attributes on the basis of Results

their pertinence to each product category and
representativeness of ethical concerns expressed
by human rights, environmental and animal
activist groups and journalists.
Respondents were shown hypothetical
newswire articles that highlighted the features of
the product category (see Appendix A). These
articles were pre-tested for believability and com-
parability across both product categories and
these tests indicated that they were realistic and
effectively similar in style and content. All
subjects received a core part of the article
describing functional features of their product
category, but were randomly assigned to eight
experimental conditions that systematically varied
the presence or absence of the ethical factors
mentioned in the articles (see Table II).
Simple sample results
In total, 1,253 people were surveyed: 396
undergraduate subjects in Hong Kong, 357
MBA students in Australia, and 500 Amnesty
International supporters (also in Australia). 111
surveys were completed and returned from the
Hong Kong students (28 percent), 162 from the
Australian MBAs (45 percent), and 172 (34
percent) from the Amnesty International sup-
porters. Table III contains summary statistics
that characterize the respondents. Hong Kong
subjects are mostly undergraduates, hence are
considerably younger than both the Australian
graduate students and the Amnesty International
(AI) supporters. They are also less likely to have
children, be married or have postgraduate
degrees.1 Considerably more women responded
in the Amnesty International supporter (67

TABLE II
Choice experiment conditions

Experimental condition 00000000000000000000000Product category

Athletic shoes Soap

0 – Control (No ethical features in article profile) NNNN NNN

1 – Control (All ethical features in article profile) MMMM MMM
2 NNNN NNN
3 NNMM NNM
4 NMNM NMN
5 NMMN NMM
6 MNNM MNN
7 MNMN MNM
8 MMNN MMN
9 MMMM MMM

N = Ethical feature is not mentioned in the article and included in survey

M = Ethical feature is mentioned in the article and included in survey
Order of ethical features (e.g, MMM and MMMM implies that all are mentioned):

Athletic Shoes 00000000000000Soap

Child labour Biodegradable formulation

Workers paid above minimum wage Animal testing
Working conditions Animal by-products used as ingredients
Living conditions
288 Pat Auger et al.

TABLE III
Sample characteristics

Hong Kong Australian AI supporter

university university sample
sample sample

Male (percent) 46.40 68.10 33.00

Age (percentages)
≤ 19 00.90 00.62 01.50
20–29 93.80 61.11 16.90
30–39 05.40 31.48 21.90
40–49 00.00 03.70 27.30
50+ 00.00 01.23 32.30

Education (highest degree)

High School 18.02 01.85 11.20
Attended university 27.93 00.00 15.70
University degree 45.05 54.94 54.30
Post graduate degree 03.60 38.27 18.80

Family income
≤ $20 999 36.04 14.20 13.80
$21 000–$35 999 33.33 54.32 19.50
$36 000–$61 999 13.51 00.00 29.20
$62 000–$77 999 05.41 24.69 07.70
≥ $78 000 09.91 00.00 29.70

Lifestyle
Single 93.69 59.26 30.30
Married 03.60 23.46 49.00
Divorced 00.00 03.09 08.60
Cohabiting 00.90 11.11 01.50

Children (percent having) 01.70 14.29 48.00

Ethnicity
White (European/American) 00.00 46.30 83.60
Chinese 98.20 19.75 00.00
North or South East Asian 00.00 04.94 15.90
South Asian 00.00 09.88 00.50
Black, Native or Arabic 00.00 03.09 00.00

Note: At the time of the surveys, A$1.00 = US$0.63 and US$1.00 = HK$7.73. Numbers may not add up to
100 percent due to missing data.
 What Will Consumers Pay for Social Product Features?
percent) and Hong Kong (54 percent) samples
than in the Australian university sample (32
percent) due largely to a greater proportion of
females in these samples (the gender balance in
each response group did not differ significantly
from the sample characteristics). Although the
sampling does not claim to be representative of
either the populations of Australia or Hong
Kong, these statistics do indicate that a wide and
diverse group of individuals took part in the
survey and they are representative of a wide cross
section of society.
We undertook additional comparisons to
identify other differences in the samples. The
average MACHIV scale score was approximately
the same in both groups of students but much
lower in the case of the AI supporters (the
MACHIV scale has a neutral midpoint of 100
and ranges between 60 and 140). Specifically,
t-tests between the samples indicated that the
students were significantly different on their
average MACHIV score from the AI supporters
at 0.001 level (t values of 3.30 for Australia vs
AI and 3.96 for Hong Kong vs AI) while the two
student samples were not significantly different
(t value of 0.20). We also found that women
scored lower on Machiavellianism (mean of 95.10
versus 97.48 for males; t = 2.50 p < 0.01). To
test whether there were sample differences on
these measures other than what would be related
to demographic and individual differences we
regressed the MACHIV scores on a host of
demographic and individual characteristics and a
dummy variable for the sample (with the
Australian MBA as the baseline). The results
(available from authors) imply that there are no
sample differences of note other than what is
related to demographic and individual differ-
ences.
Table IV summarizes the evaluations of con-
sumers’ current brands. The figures in Table IV
exclude subjects who indicated that they did not
feel confident enough to know the feature pos-
sessed by their current brand. Table IV suggests
that consumers are reasonably confident in their
knowledge about non-ethical features of current
products, but are quite poor at remembering
some of the most basic ethical attributes of the
products they purchase. For example, 90 percent
289
of Hong Kong subjects did not know the ethical
features of their current bath soap and only 5
percent knew ethical features of their athletic
shoes; 80 percent of the Australians did not know
the ethical features of their current soap and only
10 percent knew the ethical features of athletic
shoes. AI supporters were somewhat more
knowledgeable about the ethical features of their
bath soap but less knowledgeable about ethical
features of their athletic shoes. Nike dominated
the brands purchased by all consumers, particu-
larly so in Hong Kong.
Conditional choice experiment results
Our next set of analyses consisted of a series of
binary logit models that take into account dif-
ferences in the EDS, demographics, and infor-
mation on the nature and breadth of ethical
attributes. The analyses produced a mass of data
due the number of variables included in the
models. We included the following variables for
each product category: (1) the features of the
products (traditional and ethical), (2) demo-
graphic variables (including MACHIV score), (3)
controls for missing demographic variables, (4)
controls for experimental conditions (informa-
tion supplied in articles), (5) 2-way interactions
between experimental conditions and demo-
graphics (a total of 44 variables for soap and 55
for athletic shoes), (6) 2-way interactions
between the ethical features, and demographics
and experimental conditions (33 variables for
soap and 44 for shoes), and (7) 3-way interac-
tions between ethical features, experimental con-
ditions, and demographic variables (30 variables
for soap and 40 for shoes).
The large number of variables in each analysis
precludes us from including the details of the
analyses in the paper. Instead, we conducted
several additional analyses to simplify the pre-
sentation of our results: (1) an analysis of the
importance of specific variable groups; and (2) a
stylistic presentation of different consumer
segments based on their valuation of ethical
features that highlights the magnitude of the
importance of these features.
290 Pat Auger et al.

TABLE IV
Current product evaluations

HK university Australian university AI supporter

sample sample sample

Soap (percent knowing)

Shape 087.03 097.24 92.55
Ingredients 035.18 058.53 51.06
Scent 096.30 095.12 91.49
Artificial coloring 038.89 063.41 55.32
Moisterizer 066.67 080.48 65.96
Anti-bacterial 038.89 074.39 62.77
Pore clogging 027.78 037.80 22.34
Acne causing 025.29 040.24 27.66
Price 064.81 090.24 78.72
Biodegradable 007.41 023.17 20.21
Animal testing 009.25 014.63 21.28
Animal by-products 011.11 014.63 29.79

Soap brand (percent of last purchases)

Local brand 018.51 036.58 45.74
Multinational brand 040.74 031.70 23.40
Don’t remember 040.75 031.72 30.85

Athletic shoe (percent knowing)

Shock absorption 067.77 087.50 75.31
Weight 080.70 090.00 71.60
Suppleness (ankle support) 089.50 092.50 80.25
Sole durability 070.18 075.00 55.56
Breathability 063.15 081.25 46.91
Fabric 061.40 097.50 83.95
Reflectivity 094.73 096.25 83.95
Fit 092.98 096.25 85.19
Price 100.00 100.00 88.89
Child labor 005.26 011.25 06.17
Minimum wage 007.01 008.75 02.47
Dangerous working conditions 005.26 010.00 02.47
Acceptable living standards 003.51 010.00 02.47

Athletic shoe brand (percent of last purchases)

Nike 070.17 040.00 29.63
Reebok 005.26 013.75 06.17
Adidas 007.01 007.50 12.35
Asics 000.00 008.75 04.94
All others 017.56 030.00 46.91
 What Will Consumers Pay for Social Product Features?
What factors matter to consumer purchasing behavior?
Because of the complexity of our estimated
model, we investigated the significance of groups
of variables by removing them from the analyses
and comparing the consideration and purchase
likelihoods to the base model using a chi-square
test. This is similar to performing an ANOVA
in which the conditions are presence/absence of
the variable(s) in question and the dependent
variable is the probability of consideration or
purchase. This allows us to state statistically
whether the addition of a variable (such as child
labor) or a group (such as age and gender)
significantly impacts respondents’ probability of
considering or purchasing a specific product/
feature bundle. The results of these analyses are
presented in Tables V and VI for bath soaps and
athletic shoes, respectively.
The results clearly show that ethical features
have a substantial impact on the purchase inten-
tions of the consumers in our samples. These
effects are demonstrated by the high levels
of significance when the ethical features are
removed from the models as a group and by the
predominance of large effect sizes for these vari-
ables. This large effect sizes must, however, be
kept within the context of our sampling proce-
dure, which aimed to maximize effect sizes by
carefully selecting the groups of respondents (e.g.,
Amnesty International volunteers versus business
school students). Of the possible significant
effects, between 20.4 percent (for athletic shoes)
and 18.5 percent (for bath soap) were related to
the ethical features.2 Further examination of
individual ethical features indicates some subtle
differences. For bath soaps, animal testing is
highly significant but biodegradability is much
less important and use of animal-by-products is
insignificant. A similar pattern emerges from the
athletic shoe analyses with the overall ethical
features group highly significant, but only child
labor and dangerous working conditions indi-
vidually significant. Child labor is clearly the
most important ethical feature in purchase/con-
sideration probabilities, dominating a majority of
the functional features.
We found little support for a relationship
between ethical disposition and ethical decision-
making. The Machiavellianism group of variables
291
was only significant in one model – the consid-
eration model for athletic shoes – and we con-
cluded that ethical disposition has little predictive
power with respect to ethical decision-making.
These results are consistent with Roberts (1996),
but slightly inconsistent with the moral judgment
literature (e.g., Rest, 1986). We qualify this
inconsistency as “slight” since the theoretical
link between moral judgment and behavior is
expected to be modest (Rest et al., 1997) and
with nearly one third of empirical studies unable
to show a statistically significant relationship
between the two (Thoma et al., 1986). On the
other hand, demographic variables were signifi-
cant in all models, especially age and gender,
lifestyle (e.g., divorced, single, married and
cohabitation), and ethnicity. The income and
education group was highly significant in the
bath soap models, but much less significant in the
athletic shoes models (this appears to be driven
almost entirely by income). Interestingly, we
could discern no immediately obvious pattern.
For example, for bath soaps, older females were
less likely to purchase products using animal
testing and more likely to purchase biodegrad-
able products; however, for athletic shoes,
younger consumers were more affected by child
labor and older consumers by minimum wage
payments. Although all consumers responded
negatively to bad ethical features, Chinese con-
sumers were less negative in their responses and
White consumers exhibited more extreme
responses to “bad” features. It is worth noting
that this effect is not confounded with the three
separate samples because the AI and MBA
samples include a reasonable proportion of non-
white respondents.
An important issue is the extent to which
information on ethical features can affect on
the nature and breadth of purchase intentions
and valuation. Our results strongly suggest that
providing information about ethical features
increases the size of that feature’s effect on
consumer purchase probabilities. For example,
28.5 percent (athletic shoes) to 28.7 percent (bath
soap) of the possible significant effects were
influenced either directly or indirectly by men-
tioning an ethical feature. This was particularly
true for animal testing in the case of bath soaps
 292

TABLE V
Effect of variable groups on consideration and purchase probability equations: bath soaps

Consideration model Purchase model

Log Degrees of ρ2 Log Degrees of ρ2

likelihood freedom likelihood freedom

Full model (All variables included) 1758.86 143 0.222 1420.25 143 0.224

Effect of removing ethical product features

All ethical product features 1381.59*** 077 0.174 1072.01*** 077 0.171
Biodegradable formulation 1686.89*** 121 0.213 1350.83*** 121 0.215
Animal testing is done 1497.23*** 121 0.189 1171.09*** 121 0.187
No animal byproducts used 1710.40*** 121 0.216 1360.16*** 121 0.217

Effect of ethical features mentioned in article 1413.64*** 061 0.179 1092.11*** 061 0.174
Pat Auger et al.

Effect of removing demographics

All demographic characteristics 1222.19*** 034 0.135 0947.08*** 034 0.131
Age and gender 1624.02*** 118 0.205 1314.00*** 118 0.210
Lifestyle and children 1567.50*** 100 0.198 1206.31*** 100 0.192
Income and education 1645.45*** 128 0.204 1267.73*** 128 0.203
Ethnicity 1675.85*** 118 0.212 1300.50*** 118 0.207

Effect of machiavellianism 1700.41*** 131 0.215 1348.11*** 131 0.215

Effect of the interaction between ethical

features, article mentions and demographics 1705.21*** 113 0.215 1360.59*** 113 0.217

Note: * p < 0.10. ** p < 0.05. *** p < 0.01.

 TABLE VI
Effect of variable groups on consideration and purchase probability equations: athletic shoes

Consideration Model Purchase Model

Log Degrees of ρ2 Log Degrees of ρ2

likelihood freedom likelihood freedom

Full model (all variables included) 1596.54 180 0.197 1194.30 180 0.211

Effect of removing ethical product features

All ethical product features 1265.43*** 092 0.156 0971.56*** 092 0.172
Child labor is used 1436.11*** 158 0.177 1090.63*** 158 0.193
Minimum wage is paid 1552.54*** 158 0.191 1169.20*** 158 0.206
Dangerous working conditions 1501.24*** 158 0.185 1131.73*** 158 0.200
Acceptable living conditions 1549.15*** 158 0.191 1159.18*** 158 0.205

Effect of ethical features mentioned in article 1060.66*** 076 0.131 0841.52*** 076 0.149

Effect of removing demographics

All demographic characteristics 0830.29*** 042 0.102 0592.59*** 042 0.105
Age and gender 1337.82*** 148 0.165 1001.74*** 148 0.177
Lifestyle and children 1417.96*** 125 0.175 1082.87*** 125 0.191
Income and education 1498.38*** 161 0.185 1148.65*** 161 0.203
What Will Consumers Pay for Social Product Features?

Ethnicity 1465.02*** 149 0.181 1064.86*** 149 0.188

Effect of machiavellianism 1406.04*** 165 0.173 1140.22*** 165 0.201

Effect of the interaction between ethical

features, article mentions and demographics 1529.85*** 140 0.189 1148.35*** 140 0.203

Note: * p < 0.10. ** p < 0.05. *** p < 0.01.

293
294 Pat Auger et al.
and child labor, minimum wages and working
conditions in the case of athletic shoes. It also is
interesting to note that the size of the impacts
of features that were mentioned was much larger
for bath soaps than athletic shoes. We might
speculate as to why this might be, such as the
possibility that more people are knowledgeable
about the plight of shoe workers or the impact
on low involvement products is relatively larger,
but our data and results do not permit firmer
insights, so a better explanation must wait for
future research.
What is the value of ethical product features?
The choice experiment approach allows us to
convert the probability of consideration and
purchase directly into conditional dollar equiva-
lents. By comparing the dollar value of specific
bundles of product features one can estimate the
dollar equivalent of the utility that a consumer
derives from the presence/absence of specific
features. Details of how to calculate “willingness-
to-pay” for features are discussed in Louviere et
al. (2000), but briefly, the desired quantity is
simply the price sensitivity adjusted difference
in the expected maximum utilities of the dif-
ferent product mixes. Hence if the bundle of
product attributes can be represented by vector
J = {j1, j2, . . . , jk} where Jk represents J with
one product feature (k) changed (e.g., two
product are identical in every way except that
one includes child labor), the dollar value dif-
ference between J and Jk is [1/–βprice](EU(Jk) –
EU(J)), where EU(•) is the expected value of the
maximum utility of a set of product features and
–βprice is the price coefficient from the binary
logit model.
To simplify the presentation, we provide two
sets of results. The first includes the estimated
value of specific attributes independent of demo-
graphic or personality characteristics (we only
provide results for the consideration model
because results for the buy model were similar),
which allows us to look at the direct effects of
presence/absence of each feature for the sample
as a whole. These values (or “willingness-to-pay”
estimates) essentially measure the consumer
surplus received from a feature. For bath soaps
the results are shown in Figure 1 and for athletic
shoes in Figure 2 (along with an indication of
which estimates where significantly different from
zero). What is striking about the estimates is the
relatively large magnitude of the ethical features.
In the case of bath soaps, animal testing has the
largest overall effect, while the other two attrib-
utes have magnitudes similar to the moisturizers
and natural ingredients. In the case of athletic
shoes, child labor is valued more than any other
attribute other than the shoe’s “fit”. The other
four ethical features are on par with the most
significant of the base features of the shoes.
The second analysis is more stylized and shows
the creation of a series of illustrative segments
based upon specific combinations of demo-
graphic attributes. The models that we estimated
potentially allow us to examine more than 800
billion possible segment combinations; hence we
reduced this to a manageable size by simply illus-
trating a range of segments based on the per-
centage of the total product value estimated to
be attributable to ethical product features.3,4 Ten
stylized segments are presented in Table VII for
soaps and Table VIII for athletic shoes,5 which
shows that the range of possible impacts of the
ethical features can be considered in two ways:
(1) by looking at the percentage of the value the
consumer puts on the product, or (2) the dollar
value they place on an individual feature. In the
case of the former, this ranges from a low of
around 16 percent to a high of 97 percent for the
overall impact of the ethical features on consumer
choices. However, these figures are a bit decep-
tive because consumers who place relatively little
value on the features tend to obtain somewhat
higher total value from the products. Thus, if
we examine the range of dollar values we see
that biodegradability is valued fairly lowly
($0.00–$0.16) but that some segments put quite
high value on no animal testing ($0.06–$0.87)
and the absence of animal byproducts ($0.00–
$0.63). More interestingly, the segments exhibit
different patterns: e.g., segments A and B exhibit
little interest in ethical features; segments C, G,
H, I and J seem focused on animal testing and
will pay between $0.33 and $0.87 to purchase
products that do not feature testing; segment
F value biodegradability and avoid animal
byproducts and will pay a fair amount to avoid
 What Will Consumers Pay for Social Product Features? 295

Note: * p < 0.10. ** p < 0.05. *** p < 0.01.

Figure 1. Valuation of base and ethical attributes of bath soaps independent of demographics and all other
experimentation manipulations (consideration model estimations only)

animal byproducts; and segments D and E show
distinct preferences for animal testing and animal
byproducts.
Table VIII contains the results for athletic
shoes and used the same algorithm to create
segments. Again, ethical features exhibit a wide
range of impacts, but the percentages are larger
with a low of around 31 percent and a high of
94 percent. However, unlike bath soaps the total
value of the product does not seem to be related
to the value of the ethical features because
segments that value the product highly also may
value the ethical features highly, as exhibited
by segments G and H. The results for the range
of dollar values suggests that acceptable living
conditions are not highly valued ($0.47–
$29.74), payment of minimum wages is moder-
ately important ($0.32–$35.09), almost everyone
dislikes child labor ($0.28–$84.73), and there is
a wide range of values for dangerous working
conditions ($0.03–$121.44). Again, what is more
interesting is that different segments have
different patterns, albeit this is less clear-cut than
for bath soaps. For example, segment A is unique
in not caring about child labor but was quite
concerned about working conditions; segments
B and E focused more on child labor and
minimum wages; segments C, D and I were con-
cerned about child labor; segments G and H
were concerned about working conditions,
minimum wages, and child labor, with segment
H also focused on living conditions; segments
F and J were similar to G and H in so far as
they focused on all the issues but found child
labor and dangerous working conditions more
valued and wages less valuable; and segment F
was somewhat concerned about acceptable living
conditions. In general, our results indicate strong
ethical value positions in all segments.
296 Pat Auger et al.

Note: * p < 0.10. ** p < 0.05. *** p < 0.01.

Figure 2. Valuation of base and ethical attributes of athletic shoes independent of demographics, brand and all
other experimentation manipulations (consideration model estimations only)

Discussion others). The latter results allow one to obtain

General findings
Our results demonstrate that consumers have a
general and fairly rational view of ethical issues
as they pertain to product purchases. Equally
importantly, most consumers seem quite ignorant
of the ethical features that comprise the products
they consider and purchase. Overall and on
average, our subjects displayed a relatively strong
dislike of animal abuse and child labor and overall
gave quite high valuations to the ethical com-
ponents of products. In addition, we find rather
significant effects for specific ethical features for
certain types of individuals but not for others.
Although we found little association between
personality type disposition (Machiavellianism)
and the degree to which individuals would
consider ethical factors, there were strong asso-
ciations with several demographic variables such
as age, gender, lifestyle, and ethnicity (among
important insights into identifying consumer
groups (segments) that are more likely to consider
ethical features, and we showed that our analyt-
ical approach could be utilized to estimate the
values that different groups place on specific
bundles of ethical product features. This may
seem trivial but it challenges directly the limited
empirical work on environmentalism where the
search for “green” consumers has come up empty
(e.g., Manrai et al., 1997) and suggests that
readily available and measurable demographic
variables may be useful for identifying consumers
who are more likely to respond to an ethical
position by an organization.
Theoretical and practical implications
We began this study with the simple goal of
addressing a much discussed but little understood
phenomenon, the willingness of consumers to
 TABLE VII
Stylized segment examples based on valuations from consideration estimates: bath soaps

Stylized segments A B C D E F G H I J

Percentage of product
value in ethical features 16% 25% 31% 34% 40% 42% 63% 64% 95% 97%

Value of individual features:

Biodegradability $0.09 $0.01 $0.05 $0.09 $0.10 $0.16 $0.02 $0.02 $0.00 $0.00
Animal testing $0.11 $0.06 $0.40 $0.20 $0.13 $0.10 $0.33 $0.43 $0.53 $0.87
Animal byproducts $0.05 $0.13 $0.11 $0.18 $0.27 $0.63 $0.01 $0.01 $0.00 $0.00
Total value of product $1.55 $0.79 $1.83 $1.42 $1.26 $2.15 $0.56 $0.72 $0.55 $0.90

Demographic characteristics:
Gender Male Female Male Male Male Male Female Female Male Male
Marital status Single Single Married Married Cohabiting Cohabiting Married Married Divorced Divorced
Education Post grad University Post grad Post grad High school Post grad University Post grad Post grad Post grad
Ethnicity White White Non W/C White White White Non W/C Non W/C Chinese N o n
W/C
Income (range in $000) 21–36 21–36 21–36 21–36 21–36 21–36 21–36 36–62 36–62 62–80
Age (range) 30–39 20–29 30–39 20–29 40–49 20–29 40–49 40–49 30–39 40–49
What Will Consumers Pay for Social Product Features?

Children None Two None None None None None None None None

Note: Non W/C indicates ethnicity that is neither white nor Chinese. This includes North or South East Asian, South Asian, Black, Native or
Arabic.
297
 298

TABLE VIII
Stylized segment examples based on valuations from consideration estimates: athletic shoes

Stylized segments A B C D E F G H I J

Percentage of product
value in ethical features 31% 32% 47% 55% 56% 59% 65% 74% 78% 94%

Value of individual features:

No child labor 00$0.28 0$23.86 0$77.58 $30.96 0$25.02 0$79.19 0$74.40 0$85.43 0$78.87 0$79.22
Minimum wage is paid 00$8.22 0$47.49 00$6.41 0$0.32 0$15.22 0$12.15 0$35.09 0$34.85 00$3.01 00$2.90
Working conditions are
not dangerous 0$30.86 00$5.93 00$7.72 0$0.03 00$1.80 0$19.66 0$59.89 $121.44 00$2.77 0$34.76
Living conditions
are acceptable 00$1.85 00$3.20 00$0.74 0$1.35 0$18.34 0$26.49 00$0.47 0$29.74 00$4.44 00$3.49
Total value of product $134.16 $251.17 $198.19 $59.53 $108.61 $233.71 $262.85 $366.87 $114.18 $128.68
Pat Auger et al.

Demographic characteristics:
Gender Female Female Female Male Male Female Male Male Female Female
Marital status Married Single Single Married Single Cohabiting Married Divorced Cohabiting Married
Education High High University High High Post grad High University University University
school school school school school
Ethnicity Chinese White Non W/C Non W/C White Chinese White White Non W/C White
Income (range in $000) 62–80 21–36 21–36 21–36 21–36 62–80 36–62 36–62 62–80 62–80
Age (range) 40–49 40–49 20–29 20–29 40–49 20–29 20–29 30–39 20–29 30–39
Children Two Two None None None None Two Two None Two

Note: Non W/C indicates ethnicity that is neither white nor Chinese. This includes North or South East Asian, South Asian, Black, Native or
Arabic.
 What Will Consumers Pay for Social Product Features?
consider non-product ethical features in their
purchase decisions. Although there has been con-
siderable discussion about the role of non-com-
mercial factors in business activity, there is little
solid empirical scientific evidence to support any
one position. For example, although the South
Africa boycott is looked on by human rights
groups as a model for how such activity can
be effective in changing a regime’s stance, and
is being replicated in the case of Burma, the
scientific evidence appears to indicate that the
financial impact of the boycott was minor (Teoh
et al., 1999). However, this is only one side of
the story because if publicity can be targeted at
a significant and concerned group of consumers,
it is conceivable that more than the pride of
senior management can be damaged. For
example, the alignment of anti-globalization
groups with labor activists could be quite coun-
terproductive. Edmonds and Pavcnick (2002)
show that targeted trade sanctions on exports
from developing countries to eradicate child
labor lead to significantly worse living and social
conditions for children and women. What we
contribute is the fact that the average consumer
in our sample is quite willing to pay a signifi-
cant percentage of the value of the product for
specific ethical features. If this is a somewhat
more generalizable phenomenon it indicates that
perhaps the most significant motivator for
business to take ethical considerations seriously
is not the stick of policy sanctions or rabid pro-
testers but the fact that their primary stakeholders
– their customers – may be more amenable to
paying for such features than previously believed.
What is clear from the extensive work in the
area is that individuals, at least in developed
countries where all the research has been done
to date, have attitudes that are aligned with a
more ethical stance around purchasing. However,
as we have noted there is a paucity of evidence
that when we go beyond attitude to behavior.
Luzar and Cossé (1998) apply the Azjen and
Fishbein (1980) model to show that the taking
into consideration beliefs, intention and attitudes
significantly increases the predictive validity of
contingent valuation models, which is a variant
of the methodology used here. The main finding
of their work is that attitudes mattered when they
299
were most salient; meaning that they were atti-
tudes quite clearly related to the issue at hand
rather than more general behavioral measures.
This is consistent with our findings although
we don’t measure specific attitudes toward
the ethical features used.6 What we do know
is that general beliefs, as measured by the
Machiavellianism scale,7 do not relate to any
specific level of intention to pay. However, what
we do show is that salience matters and salience
can be altered with information. For example,
despite occasionally extensive media coverage
afforded to ethical issues, our results show that
most consumers do not understand the ethical
dimensions of the products that they purchase.
However, it is equally obvious that some con-
sumers could be convinced to alter their purchase
patterns if relevant ethical information is pre-
sented in an adequate and effective way. Our
analyses clearly show the significant impact of
information on ethical features and its relation to
ethical purchase intentions. This is consistent
once again with the Ajzen and Fishbein (1980)
model as applied by Luzar and Cossé (1998)
where they find that intention to act is moder-
ated by opportunity to act in a specific way.
Hence, our results provide support for anec-
dotal evidence of the effectiveness of the corpo-
rate strategies of organizations like the Body
Shop; i.e., satisfy consumers’ basic needs in the
products (the functional features) while at the
same time meet their ethical requirements. We
would speculate that companies could be under-
estimating the power of their ethical stance as at
least a short-term differentiator. Consumers may
act very differently once the right sort of infor-
mation is provided. Whether one wanted to go
so far as to argue that such evidence implies that
products should require mandatory labeling that
provided certain social guarantees (as is now done
with respect to certain products in Europe) is
beyond the scope of this work and represents a
moral stance rather than an empirical one.
However, we should caution that our work, as
well as that of others, shows that there is a sig-
nificant group of people who do not value an
ethical product position. Such mandatory policy
action would be imposing costs on these indi-
viduals that they are clearly unwilling to bear.
300 Pat Auger et al.
Limitations and future research
The focus of our research was limited. We
examined only two countries (Australia and
Hong Kong), and a limited sample within each
(university and graduate students, and Amnesty
International supporters), and two products
(shoes and soap). We restricted ourselves to a
narrow set of labor, environmental and animal
rights issues. However, these issues span at least
five of the areas covered by the Universal
Declaration of Human Rights, the International
Convention on Civil and Political Rights and the
International Covenant on Economic, Social and
Cultural Rights – working under favorable con-
ditions, the right to rest and leisure, the right to
food, clothing and housing, children’s rights, and
the right of procreation. However, even with
these limitations we found some consistent and
interesting results that have potentially important
implications for the way corporations’ view their
customers.
Naturally, our research also has limitations. For
example, a wider sample of consumers, products
and ethical features would seem to be both
desirable and necessary. In particular, a broader
sample of countries could provide insights about
whether our results were due to a more affluent
sample of consumers. For example, when the
Universal Declaration of Human Rights was
being formulated, it was found that leaders
around the world considered the same set of
rights important but for very different reasons.
Indeed, Jacques Maritain noted that “we agree
about the rights so long as no one asks us why”
(Glendon, 1998). Also, had we been able to
control for cultural orientation (e.g., Aaker and
Maheswaran, 1997), we could have avoided gross
characterizations of country cultures. Finally,
better integration of work on brand personality
and equity (e.g., Aaker, 1997; Erdem and Swait,
1998) could provide a useful addition to both the
ethical consumerism and branding literatures
because our results suggest that there are aspects
of brands not covered by this literature.
The growing importance of this topic can be
seen in the current movement toward social
accountability audits (Economist, 1999), and the
increasing amounts of money that corporations
spend to “fix” systems under pressure from
increasingly sophisticated interest groups. Our
research is relevant to this issue because it shows
that although consumers do not understand the
ethical dimensions of the products they purchase,
these dimensions can influence their purchases
if information about them is properly presented.
From a managerial perspective, more work needs
to be done on educating consumers to the
hidden ethical nature of the products they
purchase. Corporations also need to understand
which customers care about ethical dimensions
and what dimensions they care about. However,
our results also suggest that consumers won’t
sacrifice product performance for ethical con-
siderations in spite of what activists might hope.
Acknowledgements
This research was supported by funding from
the Faculty of Business at the City University
of Hong Kong, the Centre for Corporate
Change at the Australian Graduate School of
Management and the Australian Research
Council. We would like to thank Amnesty
International for their support and participation
in this research. The opinions expressed herein
are those of the authors only. The authors are
listed alphabetically and contributed equally to
the project.
Appendix A: Examples of priming
articles
Athletic Shoes – All Ethical Features Mentioned
A sneaker by any other name
By Sandra Berwyn
The product choice available to today’s athlete – pro-
fessional, amateur or casual – is truly amazing. Also
what was once a product for use only by the athlet-
ically inclined has become an everyday fashion item.
The humble sneaker has come of age.
Today’s sophisticated athletic shoes are made for
many different people and purposes. They differ based
not only on comfort and cushioning but have many
 What Will Consumers Pay for Social Product Features?
additional specialized characteristics. Shoes vary based
on their ability to ventilate your feet, whether they
support your ankles, their weight and the durability
of the soles. Reflective athletic shoes protect the
nighttime athlete by increasing his/her visibility.
Shoes are available in a variety of synthetic and natural
materials.
Most athletic shoes are made in developing nations
where labour rates are lower and production less
costly. This has raised a dilemma for shoe manufac-
turers since the labour standards in these countries
can be quite lax. It is not uncommon to find that
products coming from these countries have been
manufactured using child labour or produced in
substandard manufacturing facilities. Additional com-
plaints are that many workers work for less than the
legally mandated minimum wage and their employers
do not provide adequate living conditions at the
factory.
It was once the case that when you purchased a
running shoe or basketball shoe your choice was
limited to a few standard options. However, the
variety available to today’s consumer is a blistering
array that is meant to satisfy almost any consumer’s
athletic requirements.
Source: GlobeNet News Service
Athletic Shoes – No Ethical Features Mentioned
A sneaker by any other name
By Sandra Berwyn
The product choice available to today’s athlete – pro-
fessional, amateur or casual – is truly amazing. Also
what was once a product for use only by the athlet-
ically inclined has become an everyday fashion item.
The humble sneaker has come of age.
Today’s sophisticated athletic shoes are made for
many different people and purposes. They differ based
not only on comfort and cushioning but have many
additional specialized characteristics. Shoes vary based
on their ability to ventilate your feet, whether they
support your ankles, their weight and the durability
of the soles. Reflective athletic shoes protect the
nighttime athlete by increasing his/her visibility.
Shoes are available in a variety of synthetic and natural
materials.
It was once the case that when you purchased a
running shoe or basketball shoe your choice was
limited to a few standard options. However, the
variety available to today’s consumer is a blistering
301
array that is meant to satisfy almost any consumer’s
athletic requirements.
Source: GlobeNet News Service
Bath Soaps – All Ethical Features Mentioned
It’s not just an ordinary bar of soap
By John Baldwin
Soap is one of the oldest and most basic commodi-
ties known to mankind. It exists in a variety of forms
and is used by billions of people everyday. The
ordinary bath soap, that bar sitting in your bathroom,
can be anything from the very simple formulation
used, and perhaps made, by your grandmother to a
quite complex mixture of ingredients.
Today’s sophisticated soaps are made for many
different people and purposes. They vary based not
only fragrance and moisturizing capacity but have
many additional medicinal characteristics. Non-come-
dogenic soaps keep the bather’s pores open and
unclogged while non-acnegenic soaps are specially
formulated so as not to aggravate acne conditions.
“All natural” soaps avoid the use of non-natural ingre-
dients and artificial colouring and “anti-bacterial”
soaps aim to stop the spread of germs.
Traditional soaps are made from animal by-products
(e.g., from tallow, a rendering of beef fat). A concern
for animal rights and environmental protection has
had an effect on the lowly soap. Companies today
market products guaranteed not to be tested on
animals or use any animal by-products. Similarly,
concern for the environment has led to the develop-
ment of soaps with biodegradable ingredients.
It was once the case that when you purchased a
bar of soap your only choice was the rectangular bar
or the round bar. However, the variety available to
today’s consumer is a blistering array that is meant to
satisfy almost any consumer’s skin type and cleaning
requirements.
Source: World News Service
Bath Soaps – No Ethical Features Mentioned
It’s not just an ordinary bar of soap
By John Baldwin
Soap is one of the oldest and most basic commodi-
ties known to mankind. It exists in a variety of forms
302 Pat Auger et al.
and is used by billions of people everyday. The
ordinary bath soap, that bar sitting in your bathroom,
can be anything from the very simple formulation
used, and perhaps made, by your grandmother to a
quite complex mixture of ingredients.
Today’s sophisticated soaps are made for many
different people and purposes. They vary based not
only fragrance and moisturizing capacity but have
many additional medicinal characteristics. Non-come-
dogenic soaps keep the bather’s pores open and
unclogged while non-acnegenic soaps are specially
formulated so as not to aggravate acne conditions.
“All natural” soaps avoid the use of non-natural ingre-
dients and artificial colouring and “anti-bacterial”
soaps aim to stop the spread of germs.
It was once the case that when you purchased a
bar of soap your only choice was the rectangular bar
or the round bar. However, the variety available to
today’s consumer is a blistering array that is meant to
satisfy almost any consumer’s skin type and cleaning
requirements.
Source: World News Service
Notes
1
Somewhat wishfully, many of the Hong Kong
respondents answered the question about having a
university degree as if they had already achieved the
degree.
2
These numbers are determined by counting the
number of times a variable appears (excluding price,
brand and control conditions).
3
This turns out to be a hugely complex task since
every valuation needs to be considered relative to
alternative bases; that is, each segments value of each
attribute is conditional upon the level of all other
attributes. For simplicity, we assumed that (1) all the
“valued” base product features were available and (2)
that all changes in other characteristics, income, edu-
cation and so on, were relative to the mean of the
sample.
4
We also limited out illustration by estimating the
segment values using the consideration model and
keeping the range of demographics restricted. So, for
example, we only looked at the range of incomes and
ages above and below the median (not the full range
of the sample).
5
It is important to not overly compare the estimates
from Figures 1 and 2 with those from Tables VII and
VIII. The estimates in Figures 1 and 2 assume no
demographic heterogeneity exists – in essence zeroing
out all but direct effects and comparing the results to
a product in which none of the attributes features are
present – while those in Tables VII and VIII are based
upon the differences from a mean profile. Given the
results from Tables VII and VIII show that the demo-
graphics matter quite a lot, the estimates in Figures 1
and 2 should be utilized just to understand the mag-
nitude of direct effects. This can be seen by the fact
that Table VII shows that animal byproducts are not
important but the direct effect shown in Figure 1 is
significant. This is due entirely to the negating effect
of demographics on the impact of the direct effect.
6
In the case of the Australian MBA sample and the
Hong Kong undergraduate sample we also included
questions taken from the MORI poll used by
CAFOD. These items asked general intent questions
and could arguably said to represent attitudes with
regard to specific ethical positions (e.g., child labor,
work practices, animal testing, etc.). There was no
relationship between the response to these uncon-
strained survey questions and intention to purchase
specific products containing certain ethical features
that were not being picked up by demographics. It
was excluded from the Amnesty International sample
for simplicity of execution.
7
Just for clarity it should be stated that we used a
number of different belief measures tapping moral
relativism and ethical idealism. None of these
measures had any impact either. The Machiavellianism
scale was kept as evidence of this lack of relevance to
consumers’ valuations.
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