How Does Consumers’ Green Brand Awareness Affect Their Willingness to Pay a Premium for Green Products? The Mediating Role of Green Brand Loyalty and the Moderating Role of Green Perceived Risk

In developing markets characterized by pervasive information asymmetry and sophisticated greenwashing practices, promoting sustainable consumption requires moving beyond basic brand recognition to securing genuine financial commitment. Integrating S-O-R theory, perceived risk theory, and information economics, this study develops a comprehensive consumer brand equity model to examine how cognitive brand signals translate into economic and financial sacrifice. Specifically, it investigates the mediating role of green brand loyalty and the moderating role of green perceived risk in shaping consumers’ willingness to pay a premium. Utilizing PLS-SEM on 556 valid survey responses from green fashion consumers, the empirical results indicate that green brand awareness is the single strongest driver of green brand loyalty, yet its direct effect on willingness to pay a premium is comparatively weak. Contrary to initial expectations, green perceived risk does not significantly moderate the relationship between green brand loyalty and willingness to pay a price premium. This suggests that established brand loyalty alone is insufficient to buffer against consumer skepticism or environmental uncertainty when perceived risks are prominent. These findings advance green marketing literature by demonstrating that willingness to pay a premium is an affect-driven economic output rather than a direct derivative of brand visibility, offering actionable strategies to help green brands mitigate greenwashing concerns while sustaining premium pricing.