Willingness to pay for certified wooden products: a critical literature review

Forest certifications aim to promote sustainable forest management through the certification of forest products derived from forests managed according to a set of guidelines. Since the 1992 Earth summit in Rio de Janeiro (Johnson, 1992), where it was agreed that the world’s forests must be sustainably managed and that wood products entering international trade must come from sustainably managed forests, certification of forest products has been significantly growing (Blanc et al., 2019).

The main certification systems currently used are the Forest Stewardship Council (FSC) and the Programme for the Endorsement of Forest Certification schemes (PEFC). As of May 2021, the total FSC-certified forest area worldwide was approximately 226 million hectares (FSC, 2021) and almost 330 million hectares of forest area is managed in compliance with PEFC’s internationally accepted Sustainability Benchmarks (PEFC, 2021).

Managing a forest following the sustainability benchmarks stated by the different certification systems has a higher cost compared to non-certified forests, with a difference ranging from 5% to 25% (Hoang et al., 2015; Nussbaum et al., 1996). Consequently, this difference is also reflected in the price of the products. An environmentally certified timber product (ECTP) is therefore expected to be more expensive than its identical competitor made of non-certified wood because of its higher cost of management and chain of custody (Aguilar & Vlosky, 2007; Boyer et al., 2021), and also because it contains a higher value component, which well-informed and sustainability-sensitive consumers recognise. Precisely because of this higher value component, ECTP manufacturers and traders seek to recover additional costs by adding a price premium (PP) to the base price of the certified product (Daniels et al., 2010; Higgins et al., 2020).

In this context, it is important to identify the most effective and efficient methodology to evaluate the willingness to pay a PP. There are several methodologies used to assess individual and collective preferences, among them are those based on revealed preferences, which are based on the actual behaviour of individuals in related and correlated markets, such as hedonic price and travel cost (Xu et al., 2022; Sinclair et al., 2022) and those based on stated preferences, which instead stem from the creation of a hypothetical market and the declaration of preference, such as contingent valuation and discrete choice experiments (Abdeta, 2022; Brain et al., 2022).

Due to the generally negative media coverage of logging, primarily involving the illegal timber trade, and the loss of forest due to extreme events, consumers’ perceptions of logging are threatened, while one fifth of the world’s forests are under-managed or not managed at all (Bruzzese et al., 2020). Consumers have developed a growing concern for sustainable forest management (Solomon et al., 2010); in particular, in Europe and North America young people between the ages of 18 and 35 are showing increased awareness towards the issue (Notaro & Paletto, 2021). Several studies have demonstrated that a higher level of education usually entails a higher degree of attention to and knowledge of environmentally sustainable practices (Dettmann & Dimitri, 2009; Migheli, 2021; Panzone et al., 2016). This increased consumer focus on more environmentally sustainable products has enabled the existence of a niche ECTP market (Hansen et al., 2006).

In the past, as stated by Forsyth et al. (1999), the certification of wood products was based on the premise that the end consumer, aware of the benefits of sustainable forest management, when given a choice between two identical products, would choose the certified one. In recent years, several scientific studies have analysed consumer behaviour in relation to products with forest certifications (Anderson & Hansen, 2004; Mohamed & Ibrahim, 2007; Notaro & Paletto, 2021); these studies have shown the consumers’ inclination towards purchasing environmentally friendly products. The drivers that lead the consumers surveyed to choose ECTP are related to sustainable forest management, but also to the benefits that this type of management brings to human health.

The purpose of this review is to highlight how, over the past decade (2010–2020), academic research has focused on the topic, with regard to the consumers’ study. This time interval was chosen because another review on the same topic was conducted in the previous decade by Cai & Aguilar (2013), in which papers published between 2000 and 2009 were considered.

The study specifically developed the following points: -

analyse the relationships among research groups dealing with wood products certification, highlighting which countries are giving more attention to the issue;

The structure of the paper first contains a bibliometric analysis of the results obtained from the use of the search strings, assessing both the interest in the topic by the scientific community and the spread of active research groups. Next, a critical selection of the products was carried out, according to their relevance to the topic explored. This was followed by a specific qualitative review of WTP for certified wood products, exploring the statistical methodologies used and key consumer drivers highlighted in the literature.

The review and data collection involved two steps: first, we conducted a quantitative bibliometric and network analysis on the records obtained in the Scopus database. The second consisted of a systematic literature review in which the role of consumers’ WTP for certified forest products was investigated in more depth.

In order to carry out both analyses, several search terms and topic groups were identified. The terms were selected to compose the query strings and were grouped into three mains clusters on which the research focuses (see Table 1): a) product, b) certification and c) consumer.

The search conducted on Scopus using the terms “forest certification” shows a higher concentration of studies on the topic in North America, particularly in the U.S.A. (Figure 1). Moreover, in Europe the number of publications on the topic is high, especially in Germany. This result is not surprising, because Germany is the country where the PEFC standard was developed and where FSC is now headquartered.

Figure 1

As explained above, the analysis of the citation network makes it possible to investigate the scientific relationship between research groups from different countries, highlighting their productive capacity and international relevance in terms of citations.

According to the results obtained in the second analysis, scientific production is more concentrated in the United States, China, and Canada (Table 2). The average number of citations, on the other hand, allows an estimate of the scientific relevance of a country’s publications. From this point of view, countries with fewer publications, such as Germany, Norway, Denmark, and South Korea, have a high average number of citations.

Country linkage expresses the relationship and intensity of this connection between two countries in terms of mutual citations. In Figure 2, one can see a group of countries that are strongly interconnected with the United States, which plays a key role. Other countries have multiple but weak ties, such as India, the Czech Republic, Indonesia, and Slovakia, suggesting a more contained role in the international context.

Figure 2

Considering the network of countries obtained, three nations play a nodal role, that is, the U.S.A., China, and Canada, which are also the ones showing the highest value of total linkage strength, connecting more other nations to each other. Once again, the U.S.A., China and Canada are the most productive countries by the number of publications and have the highest number of citations for their scientific output on the topic of interest.

Focusing on the research influence of different countries, which is evidenced by the bibliometric indices of average citations and average normalized citations, European countries, and in particular Norway, Denmark, and Germany, are the most influential.

The bibliometric indexes also show that there are two main areas of influence worldwide: the European area, led by the three countries mentioned above, and the Asian area, guided by South Korea and China.

Regarding the nodal keywords, “Forestry”, “Certification” and “Commerce” are the most occurred and connected keywords, showing the highest total link strength value (Table 3). Moreover, considering the connection lines between the words, it seems that the most relevant node of the network occurs between the aforementioned three words, “Forest management” and “Wood products”.

Focusing on the bibliometric indices and on the scientific relevance and influence of different indexed keywords, it becomes clear that those related to supply chain management and decision-making are the most important. It seems that, more than other research topics, the decision process and integration of eco-labels into the forest supply chain is the field with the highest research interest.

Concerning the obtained keyword network, the analysis shows three clusters of keyword associations (Figure 3). The first one (red colour), is the most relevant in the network, as it mainly deals with issues related to management and the process of integrating eco-certifications into the forest supply chain, and also includes commercial issues about the forest. The second one (green colour) is more related to economic, cost and market issues that include, only marginally, consumer behaviour on forest products.

Figure 3

Finally, the third cluster (blue colour) has the highest connection to consumer issues and their WTP for forest products. In addition, this cluster includes the topic of environmental analysis, impact and policy related to the forestry system.

In the next phase the selected bibliographic material was qualitatively analysed. Searching with the keywords listed in the Materials and Methods section allowed us to select 22 papers. After reading these papers, we further selected publications in which WTP was explicitly stated. With these limitations, the selection of articles for the qualitative part of the review was reduced to 7 papers, published on Scopus, WOS and Scholar between 2010 and 2020: (Elliott, 2014; Sakagami & Sakaguchi, 2018; Shoji et al., 2014; Shukri et al., 2013; Shukri & Awang Noor, 2012; Tan et al., 2019; Wan et al., 2018) (Table 4).

The first parameter analysed is the area of study: six of the seven selected articles were published in Asian countries, two in Malaysia, two in Japan and two in China. The other selected study was conducted in the United States. Based on the concentration found, it is interesting to analyse the research question used for the studies located in the Far East. Unlike the work conducted in the U.S.A., where the objective was to test consumer knowledge of forest certifications, the studies conducted in Asia aim to assess a potential market for certified forest products.

The products investigated in the selected papers are diverse and have different base prices: from printer paper to more expensive wood products, such as dining furniture (Table 5). This allows us to assess how the PP is related to the base price of the product.

In all publications, the respondents were predominantly men, except for article [5], where the majority of respondents were women while the average age of the respondent was between 30 and 40 years old.

The most widely used methodology to detect willingness to pay and PP for certified products is undoubtedly Contingent Valuation (CV). This method, by means of the direct declaration of the consumer, expresses in percentage or monetary terms the price increase he/she is willing to pay for the addition of the eco-label attribute, starting from a base price and proposing additional prices for a forest sustainability certification on the product. The simplicity of detection with this methodology, however, is also accompanied by a limited explanatory capacity of the data collected.

Specifically, for study [1], CV was accompanied by a non-parametric estimate of the average PP. This method allowed the estimation of the average value for the survey sample, but did not allow the identification of socio-demographic determinants that influence this price level, thus limiting the significance of the survey, despite having an adequate sample size (994 respondents).

Unlike the other studies reviewed, research [2] analyses and compares the WTP, in this case on a small sample of about 100 individuals, through another common non-parametric test, Pearson’s Chi square, which highlights the statistical difference between respondents, relating it to sociodemographic variables and outlining significant differences for at least three of them. The average PP is evaluated in this case only as the average of the frequencies obtained from a base price. Again, this methodology has limited explanatory power, whereas statistical applications not based on stated preferences are better suited to evaluate the determinants of WTP for a product.

A methodology that analyses the determinants of WTP in depth is the one employed in study [3]: the binomial logit model allows to evaluate which choice attributes exert an influence on a dichotomous variable in determining the positive response. However, once again, the limitation of the statistical model lies in the loss of information resulting from the simplification of choices, which is only dichotomous. This does not allow to analyse the effect of covariates at different levels of expressed WTP, providing only a general parameter. This is the case, for example, in paper [6] where, following the detection of WTP expressed over 7 classes, an ordered probit model was developed, highlighting the statistical effect of covariates for each level of WTP investigated, and improving the explanatory power of the data. The application, however, was preceded by a Principal Component Analysis, which reduced the informative power of the covariates. Similarly, the study [7] also applied a similar information power methodology, the tobit model.

Of all the studies analysed qualitatively, those with the most effective and, at the same time, the most recent methodology are [4] and [5], in which the Discrete Choice Experiment (DCE) methodology is employed. In DCE models, the independent experimental design is intended not only to highlight choice attributes that are significant to the consumer, but also to accurately estimate the PP that a consumer is willing to pay. Such analyses are considered the most reliable, although it is possible to overestimate WTP (Cai & Aguilar, 2013). In addition, from such models, it is also possible to perform a cluster analysis in order to link consumer characteristics to the attributes of the products being studied. Again, sample size plays a key role in the model’s ability to analyse. From this point of view, study [4] has less information power than study [5], which includes over 600 surveys.

Table 6 provides an overview of the different types of drivers and variables used in the qualitative literature to understand the characteristics of consumers who are willing to pay an additional price for certified forest products. Papers [1], [4] and [5] used the additional premium method and choice experiments to estimate WTP, focusing on the willingness-to-pay and the role of product characteristics. Hence, the effect of consumer characteristics is not available.

From the findings, several areas can be identified for further investigation, either by including new sociodemographic variables, such as the number of family members, or by combining the role of sociodemographics with other consumption factors. In addition, studies [3] and [7] used a synthetic method based on a single question to assess the effect of knowledge. Constructs, such as subjective and objective knowledge are available in the literature that could make these analyses more reliable (Aertsens et al., 2011; Flynn & Goldsmith, 1999).

It should be noted again that the analysis of sociodemographic variables and psychological aspects gave discordant results. This could be due to different products studied or the different countries in which the studies were conducted. However, further analysis is needed to clarify the role of consumption drivers.

In support of this, several studies emerge in the literature, such as those of Thompson et al. (2020) and Aguilar & Vlosky (2007), report that the female gender tends to be more inclined to pay a PP for ECTPs, although study [1] showed the opposite. On the other hand, additional elements also seem to influence WTP, such as lifestyles or cultural orientations, as in the case of LOHAS (Lifestyle Of Health And Sustainability) for middle-class Chinese consumers, education level, or even household composition. The latter, which was analysed in case [6], can be found in the type of product analysed. Single consumers were more willing to pay a PP for children’s furniture compared to married families, both because of a simpler decision-making process, but also because of a greater availability of income to invest in such purchases. As lifestyles and education levels increase, it seems logical that the level of consumer knowledge and information will also increase, and hence there will be a greater focus on the choice and propensity to purchase ECTPs. Regarding eco-labels and forest certifications, only studies [4] and [7] made explicit reference, while the remaining articles merely explained the general principles behind these certifications and eco-labels. However, previous studies have shown that, for the same price between a certified and a non-certified product, consumers choose the certified one, because they are convinced it may have positive environmental benefits (Notaro & Paletto, 2021). In addition, the WTP a PP and consumer Purchase Intention (PI) are not the same across different eco-labels and certifications. Paper [7], in fact, demonstrated how an FSC-certified product induces higher consumer PI and PP than a non-certified product. Conversely, a CEL (China Environmental Label) product had a positive effect only on consumer PIs and not on PPs. Prior knowledge of the eco-label or forest certification has a greater positive effect on WTP than a consumer who has never seen such labels.

Another element that influences consumer purchasing behaviour is the choice of product attributes. Study [4], conducted on the Japanese market, shows that although forest certification is an important attribute, the production area and dimensional stability of the product play a primary role for the Japanese consumer intent on purchasing wood products. On the other hand, study [5] on the Japanese market also showed that consumers preferred the “Conservation of biodiversity” and “Prevention of global warming” attributes more than quality attributes. The reason could also be related to the period in which these studies were conducted, demonstrating an increasing sensitivity, over the years, on aspects related to environmental sustainability and climate crisis issues.

Several aspects and some confirmation emerge from these elements of analysis, such as the importance of promoting effective communication and marketing campaigns to raise consumer awareness of the presence and meaning of eco-labels and forest certification. Another aspect is the presence of an evident geographic effect: it influences the attributes sought in a product on behalf of the consumer and the need for producers and suppliers of wood material and policy makers to segment the market, in order to encourage a massive entry of ECTPs.

Evaluating some monetary data, we observed how the average WTP obtained in the selected articles ranges from 17% to 68% (Table 7) and is higher in products with a lower base price, such as paper, while the PP is lower for more expensive products, such as furniture. WTP is therefore inversely proportional to the base price of the products analysed. This result, even with all the limitations imposed by the small number of the studies, confirms what has already been stated in other studies and reviews on the topic of the consumer WTP (Cicia & Colantuoni, 2010). This is also consistent with the review carried out in the previous decade by Cai & Aguilar (2013).

Another pattern observed is that, in studies in which the survey was conducted directly ([1], [2], [3], [6]), the mean WTP seems to be higher compared to those conducted via online questionnaires ([4], [5]). This result contradicts the finding of the meta-analysis conducted by (Cai & Aguilar, 2013). However, it can perhaps find an explanation in the Social Desirability Bias (Fisher, 1993) which in social science is a type of response bias explaining the tendency of the respondent to answer in a way that might be viewed favourably by others (Larson, 2019). In this case, it would justify the higher WTP of directly interviewed consumers, although, again, the small number of cases analysed does not allow us to establish the validity of this hypothesis.

Forest certifications have grown significantly since their establishment in the 1990s. These certifications, among which we find FSC and PEFC, have been adopted worldwide and the area covered by certified forests is still increasing nowadays. The increase in forest certifications has allowed the existence of a niche market of environmentally friendly wood products. The presence of an environmental certification, in fact, plays an important role in the consumer’s choice of a product, even if the concept of sustainability also concerns the social and economic spheres, which are less often taken in consideration.

The purpose of this article was to review the literature on the topic published over the past decade, to evaluate consumer behaviour regarding ECTPs and their WTP a PP for a certified product. From what we gathered by the analysis of the selected papers, we could understand that consumers are generally WTP a PP for ECTP and that the PP is generally higher in products with a lower base price. This result reveals the importance of wise marketing campaigns, which are very important for this type of items, often related to everyday consumption. Through these consumptions it is therefore possible to convey messages that reach most consumers in the act of making their usual purchases. Another interesting result of the review can be found in the geographical setting of the selected publications. Despite the opening of markets linked to globalization, and wood products having always had a very open market, specific local characteristics remain. This reflects an increase in the attention to the topic in a specific geographic area, the Far East, where researchers are studying the potential market for certified forest products.

The methodologies employed can be traced back to three groups of analyses. The most widely used methodology to detect willingness to pay turned out to be Contingent Valuation. In fact, this method, through the direct declaration of the consumer, allows to express in percentage or monetary terms the price increase he/she is willing to pay for the addition of the eco-label attribute. Typically, this method was accompanied by a non-parametric estimation of the average PP through a non-parametric test, such as Pearson’s Chi Square, to highlight the statistical difference between respondents, or a binomial model to assess which choice attributes exert an influence on a dichotomous variable in determining the positive response.

The other method that was employed for these analyses was the Discrete Choice Experiment, which allows us to highlight the choice attributes that are significant to the consumer, but also to accurately estimate the price the consumer is willing to pay.

One application involved the combined use of a Principal Component Analysis (PCA), which reduced the information power of the covariates, with an ordered probit model, to highlight the statistical effect of the covariates for each level of WTP investigated.

Also due to the limited number of articles that met our stringent research requirements, the restricted area studied in these papers represents a strong limitation. In fact, we understood how the market for certified wood products is expanding in Asia, but we have no elements to make an informed assessment of how the same market is developing in other countries, particularly in Europe. Here, unexpectedly, no studies were found on these topics, despite Europe being the cradle of sustainable forest management certification systems. However, this result reflects a topic already exploited in previous decades in this area.

For these reasons, it will be interesting in the coming years to study consumer behaviour and its evolution with regard to ECTP, especially in view of the increased attention of younger generations to the issues of sustainability and climate change, in order to verify whether these feelings will actually translate into greater willingness to spend.