Globalisation and the death of distance in social preferences ad inequity aversion: mpirical evidence from a pilot study on fair trade consumers

We analyze behaviour and motivations of a sample of about one thousand consumers purchasing “fair trade (FT) goods”, i. e. food and artisan goods which include socially responsible (SR) characteristics and (generally) a price premium for primary product producers with respect to equivalent non SR products. By estimating a simultaneous two-equation treatment regression model we find that FT products have less then unit income elasticity and their demand is negatively (positively) correlated with geographical distance from the nearest shop (age and awareness of SR criteria). Awareness of SR criteria depends in turn from a series of conditioning factors (consumption habits, membership of volunteer associations) which indirectly (via increased awareness) significantly affect consumption. We also measure consumers’ willingness to pay an extra amount just for the SR features of FT products (a direct measure of consumers social preferences when controlled for factors measuring specific pros and cons of FT products) and find that it is positively correlated with awareness of SR criteria.