Do consumers care about the process, through which goods are created?
Many surveys report this interest among consumers, but experimental evidence on this is lacking. One exception is the work by Hainmuller and Hiscox: they show in Randomized Control Trials with a clothes retailer that adding a label with information on fair labor standards increased sales of an expensive item by 14%. However, a similar label with information on a program to reduce water pollution in denim production facilities had an effect only on women in retail stores. In both cases, there was no effect of labels on cheaper items or items purchased in outlet stores.
This raises the question of what standards consumers care about in their purchasing decisions, and why. In particular, how do media exposure and education affect these preferences? Is caring about environmental and labor standards a luxury, or are simply the wealthier better informed and educated on these issues?