The Impact of Economic Crisis and Prosperity on Green Purchasing

A cross-sectional study was conducted by the Financial Economics II and Economics and Business departments at the UPV/EHU-University of the Basque Country to determine whether economic peaks and troughs have different effects on internal (consumer motivations, attitudes, and perceived effectiveness) and external (environmental information and marketing) factors that affect green behavior, such as green activism and green purchasing.

The Impact of Economic Crisis and Prosperity on Green Purchasing.
María Jesús Luengo. Image Credit: Fernando Gómez. UPV/EHU

Sustainability and environmental concerns have been widely researched. Even though consumers are becoming more concerned with the environment and more businesses are selling green products, there is evidence that there is still a gulf between pro-environmental views and green consumption.

To assist organizations in creating and promoting strategies for green products, it is helpful to understand the primary variables affecting green purchasing.

The behavior of consumers concerning organic goods is a complicated phenomenon that is hard to describe, significantly impacted by the consumer’s internal characteristics, and diversified and context-dependent.

A longitudinal study was conducted by the Economics & Business and Financial Economics II departments at UPV/EHU to examine how the economic environment affects the relationships between environmental behavior and different aspects, including marketing, consumer perception of effectiveness, motivation, attitude, and environmental information.

Therefore, they conducted surveys of students enrolled in the UPV/EHU Master of Business Administration with an Innovation and Internationalization Perspective program during times of economic crisis (2008–2012) and during times of prosperity (2014–2019).

The surveys collected information on the students’ ecological consumption patterns, ecological knowledge, transportation preferences, recycling practices, etc.

Economic Crises Affect Green Purchasing Behavior

The results reveal a clear influence of the economic context, which acts as a moderator in the link between the various factors and environmental behavior. knowledge pertaining to ecological issues, organic consumption, organic products, is, in principle, less than we thought, and, what is more, neither does it exert an impact when it comes to deciding whether to make an organic purchase.

María Jesús Luengo, Lecturer, UPV/EHU-University of the Basque Country

The factors that affect green purchasing—motivations, attitudes, perceived efficacy by the customer, and green activism—are amplified during economic downturns. Motivation is the one that, out of all of them, has the most impact on green activism and green consumer behavior during times of crisis.

In other words, when the consumer makes that green purchase, it really seems to him/her that he/she is doing something that is effective, something that has some kind of impact, rather than knowing whether it is good or bad,” further stated Luengo.

However, these two key elements have identical impacts when people are in a good space.

Luengo further stated, “We were surprised that being a green or sustainable activist, i.e., one who separates waste or uses public transport, for example, does not play a major role in deciding whether or not to make a green purchase. It is more a matter of feeling that we are really doing something good for the benefit of ourselves, and the world.

In terms of marketing factors, product and price in times of economic crisis have a bigger impact on green activism than product promotion and outlet, but pricing has little impact in times of prosperity.

I think that of all the variables, price is the one that varies the most when it comes to making that decision. The price of organic products has an impact when it comes to making an organic purchase in times of crisis. In times of economic boom, however, price is of little importance, whereas distribution is more important (i.e., how convenient it is to get hold of these products), for example,” Luenga added.

Environmental information has a stronger impact during times of crisis than during times of prosperity. As a result, during economic downturns, the spread of environmental knowledge among consumers has a significant impact on environmental attitudes, which in turn have a favorable impact on green purchasing.

However, the high cost of organic goods has a detrimental impact on buying organic during a crisis, which might account for the lower levels of organic purchases detected.

Journal Reference:

Luengo-Valderrey, M. J, et al. (2022) Ecological behaviour in times of crisis and economic well-being through a comparative longitudinal study. Journal of Cleaner Production. doi:10.1016/j.jclepro.2022.131965.


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