This paper will illustrate the findings of primary and secondary research that shows products with eco-labels call for a price-premium over comparable, non-labeled products. The research method used in this study is the contingent valuation method (CVM) which estimates an individual's willingness-to-pay (WTP). Its purpose was to collect information on the attitude, behavior, and perception of consumers to purchase environmentally friendly goods, the reasons why or why not as to purchasing these goods, the awareness of eco-labels and the WTP for environmentally friendly, eco-labeled products in the economy. Along with a literature review of previous studies, this paper will include the survey results, interpretation and suggestions for future research.
A Contingent Valuation Method to Measure Willingness to Pay for Eco-Label Products
INTRODUCTIONFor many years there has been much debate over the preferences of consumers on certain items and why they are sought after. Price and quality have always been thought as the determining factors in the purchasing decisions of consumers although one factor is becoming increasingly more important, eco-labels. The presence of eco-labels is becoming more and more prevalent on consumer items these days (Case, 2009). In 1992 there were fewer than a dozen labels in the world with environmental impact, and now there are more than 300 different ecolabels in the marketplace (Case, 2009). With all of these labels becoming more present, how will companies make sure consumers know what the eco-label stands for? Or do they not want ...
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