Insights into willingness to pay for organic cotton apparel

Abstract

PurposeThe purpose of this paper is to determine consumers’ willingness to pay (WTP) for organic versus conventionally produced cotton apparel, and to explore the role of purchase behaviors, apparel attributes and consumer beliefs about organics in purchase decisions.Design/methodology/approachA 2nd priced auction was used to estimate WTP, along with a follow‐up survey to collect information on participants’ demographics, attitudes and behavior.FindingsOn average, participants were willing to pay a 25 percent premium for an organic cotton t‐shirt over the visibly similar t‐shirt made from conventionally produced cotton. Participants who pay for their own clothing or make purchase decisions alone were not willing to pay a premium. Previous history of purchasing organic foods, perceived product quality, fit and the participant's race were also significant predictors of WTP.Research limitations/implicationsA more representative sample and the inclusion of other product categories are necessary to generalize the relationships found in this study.Practical implicationsThis research helps to profile the organic cotton consumer. Findings suggest that retailers need to consider the income of target consumers when making decisions about carrying organic apparel products. Further, consumers with a history of purchasing organic products appear to carry that purchase behavior across product categories. When marketing organic apparel products, the perception of a higher quality product may yield a higher WTP.Originality/valueThe paper is one of the first to use an experimental auction in estimating WTP for apparel. Relevant consumer beliefs about organics, purchase behaviors and apparel product attributes are also explored.