Most efforts to measure the effect of corporate social responsibility look at outputs, mainly firm performance using various metrics. Another way of looking at the problem, however, is to focus on inputs; sepcifically, are your customers willing to pay more. As such, this paper is very interesting:
Many companies have made significant investments in socially responsible products. Environmentally safe cleaning products, fair trade coffee, and sustainable seafood are just a few examples. In this paper, we conduct a meta-analysis of eighty-three published and unpublished research papers across a large number of product categories and countries and using different data collection methodologies to better understand differences in willingness to pay for socially responsible products. We use two dependent variables: the percentage premium people are willing to pay and the proportion of respondents who are willing to pay a positive premium. We find that the mean premium is 17.3% and that this percentage is lower for durable than for non-durable goods and higher for goods where the behavior benefits humans (e.g., labor practices) than animals (e.g., bigger cages) or the environment. On average, 60% of respondents are willing to pay a positive premium and this does not vary by whether the good is durable. Further, along with products that benefit humans, products that benefit animals are shown to increase the number of people willing to pay a premium compared to environmentally friendly goods. Implications for retailers, manufacturers, and future research are discussed.
In other words, people will pay a premium for organic fair trade coffee beans but not for electric cars. Which might help explain why why Fisker Automotive is hovering on the edge of Chapter 11.
The paper also called to mind Rod Dreher's theory about crunchy conservatism. As his book, Crunchy Cons: How Birkenstocked Burkeans, gun-loving organic gardeners, evangelical free-range farmers, hip homeschooling mamas, right-wing nature ... America (or at least the Republican Party)
"Ewww, that's so lefty," Dreher's editor at his old National Review job sneered when Dreher said he was picking up some locally grown organic produce. And what's with the sandals I'm wearing, he then thought; am I going liberal? Not a bit, he concluded, though if associating with liberals could help him have healthy, flavorful food and a beautiful, durable home; be involved in his children's education; protect and nurture the environment and other species; and live with religious integrity, then associate, befriend, and work with liberals he would. That made him a crunchy con(servative), and since leaving NR and NY for Dallas, he has just become crunchier--and met scads of comrades, including literary patron saints G. K. Chesterton, Russell Kirk, E. F. Schumacher, and Wendell Berry and articulate representatives of the types recorded in his book's expansive subtitle.
Perhaps the reason that the paper's findings skew the way they do is that crunchy cons are willing to pay for select types of CSR, thereby increasing the target customer base for those types but not for others. But that, of course, is just rank speculation.
