Do consumers (have to) pay for ESG?

Prof. Robert Raney, IESE Business School, examines the pricing of ESG in product markets with focus on ESG-related incidents in the airline industry.

This seminar examines the pricing of ESG (i.e., environmental, social, and governance) in product markets. Price effects may be demand-driven, reflecting consumers’ willingness to pay for ESG outcomes, or supply-driven, as firms pass ESG-related costs onto consumers.

For identification, we focus on ESG-related incidents in the airline industry, which offers comprehensive public data on consumer prices. We observe that airlines increase ticket prices following ESG incidents. The price reaction is more pronounced when customers are less elastic, airlines are more elastic, or the demand-side effect is weaker.

Collectively, our results show that consumers (at least partly) pay for the ESG initiatives and that ESG-related price increases cannot be fully explained by consumer demand for better environmental or social outcomes.

Language: English

Registration: for online partecipation, please register at the link Microsoft Virtual Events Powered by Teams

Event Website: Do consumers (have to) pay for ESG? / Free University of Bozen-Bolzano