Paying for sustainable coffee in a developing country: Consumers’ profile in Costa Rica

Abstract

This article analyzes the willingness to pay of Costa Rican consumers for three environmental certifications in the coffee market, namely, Carbon Neutral, Fairtrade, and ISO 14001. A face-to-face survey was applied to 1191 Costa Rican inhabitants. The results show that Costa Rican consumers are willing to pay price premiums around 30% for all the considered environmental certifications. In addition, a Cragg’s hurdle model shows that household income, the level of education, and environmental or community activism increase the likelihood of consumers paying price premiums for environmental certifications, while men are less likely to pay than women. It was also found that the size of the price premiums that respondents are willing to pay are positively related to income, gender (female), and education, and negatively related to age. Once the effect of socioeconomic variables has been controlled for, we conclude that consumers are more willing to pay for the CN certification than for the other two. The results can be useful for participants in the coffee value chain; coffee producers can use environmental certifications both to enhance their participation in green markets, particularly in developing countries, and to improve their environmental performance.