ANALYSIS OF FAIR TRADE. ADVANTAGES FOR PRODUCERS AND WILLINGNESS TO PAY OF CONSUMER

The overall goal of this Ph.D. thesis is to perform an analysis of the Fairtrade system - the most widely recognized ethical label globally – that encompasses both consumption and production of certified products. There is a vast and heterogeneous scientific literature concerning the Fairtrade system, which has been the subject of studies in different fields, with different approaches and goals. Because of the wide scientific production and the conflicting results concerning effects and potentiality of Fair Trade, a bibliometric analysis was performed to provide a robust and comprehensive review of scientific literature. Using different techniques (productivity analysis, word frequency, social networking, cluster analysis), and different software, the intellectual base on which research is built on was assessed to map the structure of research over time and to evaluate results provided by researchers of different disciplines. This process also allowed to identify the major gaps in literature that need to be filled. The results and information obtained during this first phase of analysis of the literature provided the basis for the implementation of the subsequent research phases. To investigate the impact of Fairtrade on producers, the database collected on annual base on behalf of Fairtrade International for internal use was analyzed, which includes data from every certified producer organizations all over the world, for all the products. The analysis focused mainly on the two economic tools of the Fairtrade system: the income effect, as the active income for certified organizations gained from participating in Fairtrade, and the social premium, the amount of money received on top of the selling price by certified products to be spent in organization and community projects. To study the allocation of the revenues and of the social premium payed by Fairtrade to producers’ organizations, with respect to the stated goals of Fairtrade and to the previous findings from the literature, a combination of linear regression and kernel-based regularized least squares analysis model was used. The analysis highlights the roles of the duration of participation in Fairtrade, organization size, yields, labor intensity, the percentage of females and the share of product sold through the Fairtrade system in the network as key elements connected to the allocation of the revenues and the premium among producer organizations. As research on Fairtrade has been focused mainly on a limited number of products and in few geographical areas, a more detailed analysis of the structure and functioning of the Fairtrade cane sugar supply chain is also provided, by means of principal component analysis and hierarchical clustering. The structure and operations of sugar cane farmers organizations in the FT network were described, identifying their main features and providing a classification of organizations based on intrinsic characteristics and specific indicators. As for the consumer’s side, a non-hypothetical incentive compatible method of value elicitation was used to set up an experiment aimed to estimate the willingness to pay for Fairtrade certified products. In particular we focused our attention on 4 aspects: 1) to elicit the WTP of consumers for a white refined sugar made from sugarcane, 2) to assess the effects on consumers’ WTP of the presence of the FT logo on the sugar package, 3) to investigate the effect of information about the FT system on consumers’ WTP, and to test the method called “titration BDM” (Mazar et al. 2013), which has been proved to estimate more accurate bids. The results underlined the importance of knowledge and information in the evaluation process of a food product.