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Centers | Energy Management and Innovation Center

Consumers Levy a “Sustainability Penalty” on Certain Goods

February 1, 2010

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 series on Texas Enterprise.