Preferences for fairness and equity in the food system

Consumers have shown an increasing interest in not only how their food is produced, but also who benefits from their food purchase. In some cases, such as organics, food is marketed as being produced in an 'equitable' food system. But are consumers willing to pay for a fair food system? Using a model of inequality aversion and a set of real-money experiments, we find that about 15 per cent of consumers' willingness-to-pay a premium for organic foods is attributable to altruism and inequality aversion. The fairness premium is significantly influenced by who receives this premium, how much the consumer earns, and how the experiment is framed.