Sustainability Awareness, Price Sensitivity, and Willingness to Pay for Eco-Friendly Packaging: A Discrete Choice and Valuation Study in the Saudi Retail Sector

The increasing environmental concerns of plastic waste have encouraged more interest in environmentally friendly packaging, but consumer willingness to pay (WTP) for green alternatives in emerging markets such as Saudi Arabia is not fully explored. This research explores the relationship between awareness of sustainability and price sensitivity in determining WTP for green packaging in the Saudi retail market. The study utilizing a mixed method included both a Contingent Valuation Method (CVM) and a Discrete Choice Modeling (DCM). In it, data was gathered and analyzed using a sample of 424 urban consumers in Saudi Arabia’s major cities. The findings of OLS regression indicated awareness of sustainability had a significant, positive effect on WTP, whereas price sensitivity had a negative effect. There was a marginal interaction effect indicating that awareness could overcome price aversion. Logistic regression supported awareness as a dominant factor in binary product choice, although price sensitivity was not significant in the said model. The multinomial logit model also showed that the type of package, environmental labels (more so the “100% recyclable” type), and price had significant effects on consumer preferences. These results indicate that there is acceptance of sustainable packaging by consumers in Saudi Arabia if the product is communicated effectively and priced competitively.