In the past decade a huge number of studies have explored consumers' willingness to pay across different product categories. However the intention to pay the premium for green products had remained unexamined to a large extent in the context of emerging economies of the east. The present paper tries to prognosticate the drivers for green purchase decisions and willingness-to-pay. Structured questionnaires are used for data collection and ordinary least square regression and analysis of variance have been used for analysis of data. Results suggest the dominance of consumers' perception about the functional aspects of green products on their willingness-to-pay.
Recent studies on consumption behavior have depicted environmental apprehension resulting from across wide consumer segments. However, this has not been widely reflected upon the growth in the market shares for green or environment-friendly products mostly because gaps exist between consumers' expectations and perceptions for those products. Previous studies have highlighted the impact of perceived value on potential demand, consumer satisfaction and behavioral intentions. The necessity to understand the effects of gaps in expected and perceived values on consumers' behavioral intention and potential demand for green products cannot be undermined as it shapes the consumers' inclination to repeated purchase and consumption and thus foster potential market demand. Pertaining to this reason, the study aims to adopt a consumption value-gap model based on the theory of consumption values to assess their impact on sustainable consumption behavior and market demand of green products. Consumption value refers to the level of fulfillment of consumer needs by assessment of net utility derived after effective comparison between the benefits (financial or emotional) and the gives (money, time, or energy). The larger the gaps the higher will be the adversarial impact on behavioral intentions. A structural equation modeling was applied to assess data collected through questionnaire survey. The results indicate that functional value-gap and environmental value-gap has the most adversarial impact on sustainable consumption behavior and market demand for green products.
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