Green Behaviour

Households’ Willingness to Pay for “Green” Goods: Evidence from Patagonia’s Introduction of Organic Cotton Sportswear

R AMON C ASADESUS -M ASANELL

Harvard Business School Morgan Hall 233 Boston, MA 02163 casadesus@gmail.com

M ICHAEL C ROOKE

Former Chief Executive Officer, Patagonia, Inc. CEO of Revolution Living michael.crooke@revolution.com

F OREST R EINHARDT

Harvard Business School Morgan Hall 275 Boston, MA 02163 freinhardt@hbs.edu

V ISHAL V ASISHTH

Former Chief Strategy Officer, Patagonia, Inc. veish123@sbcglobal.net

To shed light on individuals’ willingness to pay for “green” goods (i.e., goods that are supposed to have lower adverse environmental impacts either in

We thank the associate editor and two anonymous referees for insightful comments that greatly improved the paper. We also thank Lori Bennear and seminar participants at the ASSA-AERE 2006 session on Environmental Protection and the Social Responsibility of Firms and the Harvard Business School BGIE “Brown Bag” seminar series for ´ helpful suggestions. IESE Professor Nuria Mas, Universita Bocconi Professor Giovanni Valentini, and Harvard Business School Professors Bharat Anand, Pai-Ling Yin, and Felix Oberholzer-Gee helped the authors with econometric questions. Xiang Ao of Harvard Business School’s Research Computing Services consulted with the authors on statistical and data management questions. Debbie Freier, formerly of Harvard Business School’s Division of Research, worked with Casadesus-Masanell and Reinhardt on an HBS case, “Patagonia” (HBS case number 703 035; Boston: HBS, 2003), from which much of the background information in this paper is drawn. Reinhardt also thanks Nazli Uludere of Harvard Business School and David Vogel and Mike Toffel of the Harvard Business School for helpful conversations. None of these people are responsible for any remaining errors or problems.

C 2009, The Author(s) Journal Compilation C 2009 Wiley Periodicals, Inc. Journal of Economics &...