Abstract
We conduct a choice experiment survey to determine Swedish consumers' preferences for T-shirts with different levels of health risks to the consumer, environmental impact of production, and working conditions during production. We estimate the marginal willingness to pay (MWTP) for improvements in each attribute and explore ethical trade-offs between them. We conduct the same analysis for consumers buying a t-shirt for themselves and parents purchasing a t-shirt for their children. Our findings show that the health attribute was ranked highest, followed by working conditions and the environmental attribute. While the ranking of the attributes is consistent between the two samples, parents exhibited a lower overall MWTP. We also observe a general pattern of higher willingness to pay to avoid the lowest level (‘Very Poor’) of each attribute and achieve the intermediate level (‘Fairly Good’) than for further improvements to the highest level (‘Good’). This pattern, consistent with how the levels were designed, holds across all subsamples and attributes. Thus, we find substantial demand for more sustainable clothing, particularly for avoiding the worst practices. Our results also suggest that producers could pass on a portion of their increases in costs if sustainability improvements are effectively communicated. While most consumers are not willing to pay more to reach the highest level of an attribute, there are groups of consumers who are willing to pay a premium for high sustainability standards.
