Heart Happy (cathy_edgett) wrote,
Heart Happy

Ethics -

Leave it to the Wall Street Journal to do a study on whether ethics pay.  It seems they do, but you don't want to go too far with it.  No reason to go overboard after all.    The conclusion is this.  "The lessons are clear.  Companies should segment their market and make a particular effort to reach out to buyers with high ethical standards, because these are the consumers who can deliver the biggest potential profits on ethically produced goods.

Here are some statistics.

Reward and Punishment

What consumers were willing to pay for a pound of coffee based on what they were told about the company's production standards.

    Ethical Standards - $9.71
    Unethical Standards - $5.90
    Control (no information) - $8.31

The source is Remi Trudel and Julie Cotte

A Matter of Degree

How much consumers were willing to pay for all-cotton T-shirts based on what they were told about the proportion of ethical production.

100% organic cotton - $21.21
50% organic cotton - $20.44
25% organic cotton - $20.72
Unethical behavior - $17.33
Control - (no information) - $20.04

Attitude Adjustment

Consumers with high ethical expectations of companies doled out bigger rewards and punishments than consumers with low expectations.  What each group was willing to pay for a pound of coffee based on production standards.

Consumers with high expectations:
    Ethical standards - $11.59
    Unethical standards - $6.92

Consumers with low expectations:
    Ethical standards - $9.90
    Unethical standards - $8.44

The article also points out that "if 100% ethical becomes expected among consumers, anything less will be punished."   Hmmm!    Ethics cost more but perhaps we can get by with less.  We'll see what the market demands. 


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