The series of experiments reported here revealed three main findings. First, there is an eco-label effect on taste and willingness to pay such that people are biased to prefer coffee that has been arbitrarily labeled ‘eco-friendly’ over an objectively identical non-labeled alternative; second, social desirability (i.e., the need to express believes and behaviors to gain the appeal of others) appears not to underpin the eco-label effect; and third, people who are willing to pay a premium for eco-friendly coffee does so even when they believe that they prefer the taste of a non-labeled alternative, at least people who score high on a sustainable consumer behavior scale. The results are discussed in detail below.

One reason why an eco-friendly label influence taste perception could be that people have stereotypical believes about how the production process differs for eco-friendly and conventional products. In the case of crop products, like coffee, consumers could quite easily imagine production differences that could influence taste (e.g., crop-spraying). A potentially interesting research continuation along these lines would be to investigate whether an eco-label has a similar effect on taste preferences for other products (e.g., root beer) for which the participants may have difficulty imagining how the production process could differ in such a way that it would have an effect of taste qualities. Another interesting continuation would be to investigate whether other labels that signal social responsibility – like ‘fair trade’ – have similar effects on taste perception as the eco-label. Interestingly, people seem to believe that ‘fair trade’ products (e.g., chocolate) are healthier than non-labeled products [42] . One possibility is that morally loaded labels – like ‘fair trade’, ‘organic’ and ‘eco-friendly’ – have general halo effects favorably influencing subjective product characteristics across a range of judgmental dimensions.

The magnitude of the eco-label effect appears to depend on explicit attitudes. In Experiment 1, the eco-label effect was only present in participants who reported high values on a sustainable consumer behavior scale (e.g., participants who often buy eco-labeled products and feel guilt when not doing so). The eco-label effect was replicated in Experiment 3, but in this experiment it was not related to the sustainable consumer behavior scale. In turn, Experiment 3 found that a generally positive attitude toward the taste of eco-labeled products predicted the magnitude of the eco-label effect on taste. Taken together, we therefore favor the view that the eco-label actually modifies the taste perception in individuals for whom the label symbolizes something positive because it is intrinsically rather than socially desirable. Whether eco-labeled products taste better because of attitudes toward sustainable consumer behavior that influence taste expectations, or more specifically because of attitudes toward the taste of eco-labeled products, remains less clear.

The eco-label effect was approximately equal in magnitude for the participants who made anonymous taste ratings (and willingness to pay ratings) and the participants who explicitly reported the ratings to the experimenter. This finding suggests that the participants did not report higher taste (and willingness to pay) ratings for the eco-friendly alternative at the influence of social desirability. Furthermore, it has been shown that labels create expectations that influence the actual sensory processing rather than having its impact on biased self-reported ratings [20] . Taken together, it appears as if social desirability does not underpin the eco-label effect.

Willingness to pay

How do people respond when they are told, after making a preference decision, that their preferred coffee is the ‘morally’ righteous option (i.e., the eco-friendly alternative) vis-à-vis when they are told that their preferred alternative is the ‘immoral’ option? High sustainability consumers seem to be willing to pay more for a labeled product, even when they prefer the taste of a non-labeled alternative (Experiment 2). This finding is important because it shows that the eco-label effect on willingness to pay found in Experiments 1 and 3 is not simply reflecting the positive correlation between taste and willingness to pay. Rather, willingness to pay seems to be based on taste in addition to the eco-label. Other factors may also be involved. One possibility is that high sustainability consumers exhibit an effect analogous to the so-called endowment effect [43] when exposed to a ‘moral’ label. When the preferred alternative is revealed to be ‘not eco-friendly’, these individuals need to defend their decision by increasing the relative willingness to pay for the chosen (‘not eco-friendly’) alternative, but to maintain moral standard they are still willing to pay more for the eco-friendly alternative. The traditional endowment is the propensity of individuals to increase willingness to accept (i.e., the subjective value of the good) for an object with which they have been endowed, while at the same time decrease willingness to pay for another object. In our setting, the decision of taking stand on whether the alternative with a ‘moral’ label taste better than the non-labeled alternative increases the willingness to pay for the chosen alternative. Another possible explanation is that the high sustainability consumers experience cognitive dissonance (i.e., feelings of ‘inner stress’ as a result of inconsistent attitudes or behaviors; [44]) when they learn that they prefer the taste of the ‘immoral’ (i.e., the conventional rather than the eco-friendly) alternative. They adjust the size of the premium to be consistent with their taste preference, but as this is inconsistent with their self-image and leads to cognitive dissonance, they resolve the dissonance by still reporting a higher willingness to pay for the eco-friendly alternative [45].

Taken together, the results thus speak against the notion that consumers are not prepared to pay extra for the sake of the environment alone [31]. On the contrary, our findings are entirely consistent with the idea that people may view a morally loaded label as an additional characteristic of the good. The moral thing to do (i.e., buying an eco-friendly product even though it costs more than a conventional alternative) appears to be a more important determinant to some individuals than tangible product characteristics. This interpretation accords well with related studies suggesting that evoking images (such as that of eco-labeling) that appeal to the social responsibility of consumers can lead consumers to desired behaviors [46], that consumer behavior is related to self-image motives [47], [48] and that people sometimes make pro-environment decisions to establish a view of the self as a morally righteous individual [49], [50]. Another possibility, however, that is inconsistent with the idea that altruistic rather than egoistic reasons underpin the high sustainability consumers' behavior, is that they view the label as a signal of higher quality (e.g., that the product is healthier). This latter possibility is consistent with extant research suggesting that consumers must perceive a higher quality in order for a food product to command a premium [9], but it is inconsistent with the finding that consumers are willing to pay the premium for eco-friendly products even when they are told that the products do not have any health benefits [32].

Most consumers are not prepared to pay a premium for eco-labeled alternatives and, by habit [27], [51], choose conventional products instead [52]–[56]. As shown here, from a seller's perspective, the highest average price for a product can be extracted if the consumer is told about the eco-label whilst they have already said that they prefer that product, regardless of the customers' attitudes toward sustainable consumption (Experiment 2). This technique could potentially be used to by-pass consumer habit and promote purchase of eco-labeled products in those who would normally be unwilling to pay a premium for those alternatives. Exploring this possibility is a target for future research, especially in field settings wherein the participants ‘true’ willingness to pay are measured rather than the hypothetical ‘stated’ willingness to pay that was measured here, as stated willingness to pay may not be entirely consistent with how consumers behave in ‘reality’. Moreover, low sustainability consumers appear to base their willingness to pay on taste to a greater degree than their high sustainability counterparts, perhaps because they are generally less altruistic. If this is the case, one way to promote purchase of eco-labeled products by those individuals could be to use more egoistically centered labels (e.g., health benefits).

A final conclusion concerns a potential non-separability between objective and subjective product characteristics. Our results show that the timing by which an individual learns about the subjective (non-tangible) characteristics of a product affects his or her evaluation of the objective (tangible) characteristics. This may have implications for economic models of demand estimation in which goods are treated as a bundle of characteristics.