Experimental evidence on consumers' willingness to pay in the sustainable fashion industry

This paper provides experimental evidence on consumer purchase intention and willingness to pay (WTP) in the context of sustainable consumption. Grounded in the theory of planned behavior, the literature on the intention-behavior gap, and Lancaster's model of product attributes, we examine how social and environmental preferences, alongside perceptions of quality and production costs, shape both purchase intention and revealed WTP. Using three versions of innovative sustainable products with increasing levels of circularity, we show that pro-social and pro-environmental values significantly drive purchase intentions, which are, in turn, positively associated with higher WTP. Moreover, perceptions of higher production costs and improved quality-both material and visual-further reinforce WTP for the most circular product. These findings underscore the importance of integrating behavioral factors, prior consumer experience, and product attributes when analyzing demand for sustainable goods, offering policy insights for the promotion of circular economy strategies.