Harvard eBay Experiment Evidences SA8000 Consumer Demand

A new working paper completed by Harvard University tests whether consumers really vote with their dollars for products made under decent working conditions

April 2011

eBay auction listing of the polo shirts labeled as SA8000 certified

"Consumer Demand for Fair Labor Standards," assesses consumer demand for goods that are certified as produced in decent workplaces. From experiments conducted on eBay between 2007 and 2008, researchers found encouraging evidence that a products label with a decent work certification has a positive effect on price and sales. Although SAI does not have a consumer label, the Harvard team sourced the products from an SA8000 certified facility in Honduras making polo t-shirts for Cutter & Buck, to run the simulation.   

The aim of the research was to test if consumers would really pay a price premium for certified products, as a majority says it will when surveyed on the issue.  The research team- led by Dr. Michael Hiscox, Harvard University; Michael Broukhim, Stanford University; Claire Litwin, Harvard University; and Andrea Woloski, Harvard University- set up two eBay auctions that sold identical Cutter & Buck polo shirts produced in the SA8000 certified facility, except one auction page included a label indicating that it was produced in a workplace that adhered to decent work conditions. The shirts were sold in concurrent 3-day auctions, typically twice a week, and selling a total of 42 auction "pairs." 

The findings indicated that, "a label conveying information about SA8000 certification had a substantial positive effect on bidding for the shirts in [eBay] auctions. On average, consumers paid a 45% premium for labeled versus unlabeled shirts. The findings suggest that there is substantial consumer support for fair labor standards, "even among price-sensitive eBay shoppers."   

The research team did not directly examine, or report on the motivations of consumers who respond positively to the SA8000 certified label, nor individual-level variation in support for fair labor standards.

>>Download working paper [PDF, 533KB]

For more information, contact Joleen Ong, Communications Manager - JOng@sa-intl.org.

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