What Makes a Price Fair? A Quantitative Study on Antecedents of Price Fairness and Its Impact on Willingness to Pay for Sustainable Coffee.

Abstract

Purpose - Despite the high global demand for coffee, its production is often accompanied by social, financial, and environmental challenges. While these concerns are driving the growing demand for sustainable coffee, its premium prices remain a key barrier. Thus, this study aims to examine the factors that influence consumers’ perceived price fairness and how this perception affects their willingness to pay for sustainable coffee. Methodology/Approach - An online survey was conducted using systematic sampling, with 1477 consumers personally approached in front of major supermarket chains in central Gothenburg, Sweden. With a total of 207 valid responses, the final sample represented Swedish inner-city shoppers who buy coffee on a regular basis. The data were analyzed using confirmatory factor analysis and structural equation modeling. Findings - This study revealed that perceived price fairness had a positive influence on consumers’ willingness to pay for sustainable coffee. Comparison to reference prices, trust in sustainability labels and strong positive attitudes toward sustainability have proven to be important predictors in consumers’ price fairness perceptions. Contrary to expectations, price transparency had no significant impact on price fairness. Furthermore, the model revealed that price fairness partially mediated the relationship between sustainability attitudes and willingness to pay. Implications - This study extends existing theory on price fairness judgments by adding moral and ethical determinants, necessary to include in an increasing market of sustainably sourced products. The findings suggest that marketing strategies and policies should clearly communicate the environmental and social benefits of sustainable coffee to justify premium prices and promote ethical consumption. Future research should explore whether moral factors similarly influence price fairness perceptions in other sustainable product categories.