Public procurement, consumers' preference and poverty alleviation through consumption

Abstract

Challenges due to poverty immensely burden the world's progress in fulfilling sustainable development goals. Poverty alleviation through consumption (PAC) has explored a market-oriented way of poverty alleviation by transforming consumers' goodwill to help the poor into market purchasing power. This study explores the promise of PAC by utilizing a discrete choice experiment to analyze consumers' preference toward poverty alleviation products and the effect of public procurement on it based on data from China. The results confirm that individual consumers are willing to pay a premium for the attribute of poverty alleviation, and the public procurement of poverty alleviation products can further strengthen the consumers' preference for it. However, consumers still prefer the private attribute (mainly referring to quality and local specialty) over the attribute of poverty alleviation. Public procurement weakens consumers' preference for the attribute of quality, despite strengthening their preference for the local specialty attribute. These findings prove the promise of PAC from the demand side and its relevance for an efficient policy design of poverty alleviation.