Consumer Willingness-to-Pay a Price Premium for Eco-Friendly Children's Furniture in Shanghai and Shenzhen, China

Abstract

Abstract The sustained and rapid growth of China's economy has led to the improvement of Chinese living standards. This, in turn, has led to the adoption of the lifestyles of health and sustainability (LOHAS) by many Chinese middle-class consumers. In pursuit of a higher quality of life, these consumers have shown a growing interest in eco-friendly products, including eco-friendly children's furniture. Using a structured questionnaire distributed to a sample of 320 consumers in two Chinese metropolitan cities (Shanghai and Shenzhen) in 2013, this study examined consumer stated willingness-to-pay (WTP) a price premium for eco-friendly children's furniture. Results indicate that 98 percent of respondents would be willing to pay a premium for such products. Of these respondents, 53 percent of them stated a WTP of no greater than 10 percent, while 45 percent of them stated a WTP of more than 10 percent. Results of an ordered probit model suggest significant correlations between respondent WTP and their marital status, education level, LOHAS orientation, and environmental perceptions. The findings of this study can serve as a useful reference for policy makers, furniture producers, and wood material suppliers that are currently planning to enter eco-friendly markets where price premiums might exist.