Branga-Peicu, Ioana

Market prices often do not reflect the social and environmental externalities resulting from the production of consumption goods, nor may consumers always be aware of them. Certified labels, such as Fairtrade, aim to address these sustainability concerns, but could be hampered by (a) the distance between consumption and production, and (b) a lack of knowledge regarding the local impacts of one’s purchase decisions. This paper addresses these barriers by analysing whether using a 360° Virtual Reality (VR) video, providing information on production impacts in a distant part of the world, increases sustainable consumption behaviour compared to a text-with-picture treatment and a no-information control. We do so in the context of the cocoa-chocolate value chain. We find that consumers are willing to pay a premium for prosocial and environmentally friendly features in chocolate at existing levels of information provision (i.e., no-information control). These preferences for sustainability features are positively related to consumers’ post-treatment feature knowledge and feelings of connection to beneficiaries, and moderated by their interaction. However, VR does not increase the premiums for sustainability features. Rather, VR enhances the willingness to pay for all chocolate types, i.e., with or without sustainability features. In exploring this further, we find that participants who experience immersive VR for the first time offer to pay more for chocolate broadly, as well as for sustainability features. In addition, though VR did not induce increases in the degree of consumers’ connection to sustainability beneficiaries, it led to a positive framing of individuals from the cocoa producing country by the participants. By providing a novel experience and/or conveying general insights into cocoa farmers' lives and production efforts, VR thus has the potential to increase funds for living incomes and sustainable production initiatives.