Influence of social status, physical activity, and socio-demographics on willingness to pay for a basket of organic foods

Abstract

Consumers are known to signal social status through their purchasing behaviors. As the food industry continually expands its use of strategic marketing to reach customers, understanding food’s connection to this kind of status signaling may open the door to explore new markets for farmers. This study explored the influence of social status, physical activity, and socio-demographics on an individual’s willingness to pay for a basket of high-quality organic foods. Over 3 days, participants had their physical activity measured by a pedometer, and they were randomly assigned to a social status condition and subsequently placed bids for the organic food basket using a second-price auction to measure their willingness to pay. High-status individuals were publicly recognized in order to test our hypothesis that individuals will not be motivated to pay more for an organic food basket than low-status counterparts when they have already received recognition for their high status. The results showed that on average non-students were willing to pay significantly more for an organic food basket than student counterparts. Hispanic and Asian shoppers were willing to pay more for an organic food basket than White counterparts. However, physical activity had no significant impact on willingness to pay. Ultimately, our hypothesis was confirmed that recognizing high-status individuals eliminated or reduced the need to showcase social status through higher bids for the organic food baskets.