Corporate Social and Environmental Responsibility in Services: Will Consumers Pay for It?

Two studies investigate consumer awareness of and response toward socially and environmentally responsible practices in a service industry. Results suggest that consumers exhibit more positive response toward establishments exhibiting higher levels of social responsibility, although many are uninformed of the extent to which the organizations they patronize engage in such practices. Most consumers are willing to incur a modest price increase while patronizing an organization that behaves in an environmentally and socially responsible fashion, but that willingness declines dramatically as the price premium escalates. Consumers with high involvement in and positive attitudes toward CSR practices are most willing to pay a premium. Hence, despite the increasing consumer interest in CSR, restaurateurs have limited flexibility in increasing prices to cover the costs of such practices.