Economics of ethical consumption

Although there has been little economic research on ‘ethical consumption’ in a general sense, work on its various aspects is growing. This paper reviews economic research on ethical consumption, examining both demand- and supply-side aspects. It is argued that the most promising way to see ethical consumption through an economic lens is via models with heterogeneous consumers, in which some have strong intrinsic motivation to adopt ethical-consumption practices, others will adopt if they perceive a practice to be becoming a social norm and its extra costs are moderate, and others still will be impervious to it. Implications for the spread of ethical consumption and its ability to affect change are considered.