Consumer Willingness to Pay for Ethically Produced Cotton

The United States is the largest importer of cotton apparel in the world and the largest supplier is China. The U.S. State Department among others have charged China with exploitation of the Uighur Muslim minority in forced labor in cotton farms and textile mills in Xingjian China. We examine the impact that information about this potential exploitation has on consumer WTP for denim jeans by country of origin (China, US, and ROW) using data collected from an online nationwide survey and a discrete-choice experiment. Random utility theory is the basis for the survey’s responses analysis to obtain the WTP space (Scarpa et al., 2008) that is estimated by using simulated maximum likelihood procedures (Train, 2003). We expect that consumers will express an increased relative WTP for other origins other than China after exposure to the information regarding potential labor exploitation. Investigating preferences for ethically produced denim jeans opens the possibility for a better understanding of the economic value of ethical practices that is of interest to society, manufacturers, and the retailers who distribute those products (Tully and Winer, 2014) and also to open the debate on labor practices in the textile industry.