Do consumers levy a “sustainability penalty” on certain goods?

Energy Management and Innovation Center logo Elayne Craine discusses the work of researchers Julie Irwin and Raj Ragunathan that attempts to identify gap between consumers who say they want to buy green products and those that actually do. They found that there was a "sustainability penalty" on green products where the durability, strength or quality was in question or less known than a non-green counterpart. Interestingly, the penalty doesn't exist when strength or durability is an issue.

Posted Feb. 2010
By Elayne Craine

Everyone wants to buy “green” products, right? After all, we tell
ourselves, we care about the environment and the resources left to
future generations. However, research shows that while 40 percent of
consumers say they are willing to buy “green products,” only four
percent actually do so when given the option.

What accounts for this discrepancy between what people say and what
they do? Researchers from the Department of Marketing at McCombs,
including Julie Irwin and Raj Raghunathan, have looked into this issue.

We conducted a series of controlled laboratory
experiments, as well as a field study, to shed light on this issue…The
goal of our research was to demonstrate that sustainability, though
appealing as a virtue on its own, can sometimes be a liability with
respect to consumer preferences.

The team found that there is a “sustainability penalty” levied on
goods where durability and strength are key decision factors; in other
words, all things being equal, people are skeptical of eco-friendly
tires or laundry detergent being as effective or durable as
“traditional” products. Conversely, products where gentleness is a key
decision factor (for example, baby shampoo), no such penalty exists.

Their findings also indentify ways companies who make sustainable
products can explain their products in ways that help mitigate this
penalty, for example, listing a product guarantee on the packaging.

Read a fuller summary of the study in the center’s new Energy Management Briefs.

Read an interview with Irwin and Raghunathan about this research on Sheridan Titman’s Energy Insights blog.

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