Abstract
We examine the effect of the 2008 economic recession on consumers' observed expenditures for eco-labelled grocery products. Traditional price theory predicts that consumers change their spending during an economic downturn and we would expect the sales share of eco-labelled products to fall since these are relatively more expensive than non-labelled products. We use supermarket loyalty card data from the UK and show that the recession had widely different effects on the expenditure share of different eco-labelled grocery products. We confirm, empirically, that expenditure shares on organic products declined over the time period under study but the expenditures share for fair-trade products increased over the same period. We evaluate alternative models of decision making to explain our results, viz., a salience model and a model of reputation signalling. We find that both of these models give a plausible explanation of our empirical results.
Original language | English |
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Article number | e0294167 |
Journal | PLoS ONE |
Volume | 18 |
Issue number | 12 |
Early online date | 4 Dec 2023 |
DOIs | |
Publication status | E-pub ahead of print - 4 Dec 2023 |
Keywords
- eco-labels, public goods, recession, scanner data, non-parametric regression, salience, reputation signalling