Paying More for Green Bali: A Willingness to Pay Premium Model for Bottled Water Products

A.A Made Indra Wijaya Kusuma; Pande Gde Bagus Naya Primananda; Rhenasya Oktiani Mustika

doi:10.38142/ijesss.v7i4.1967

Authors

A.A Made Indra Wijaya Kusuma Unviersitas Warmadewa, Indonesia
Pande Gde Bagus Naya Primananda Unviersitas Warmadewa, Indonesia
Rhenasya Oktiani Mustika Unviersitas Warmadewa, Indonesia

DOI:

https://doi.org/10.38142/ijesss.v7i4.1967

Keywords:

Perceived Value, Environmental Awareness, Price Sensitivity, Willingness To Pay Premium, Green Consumer Behavior, Environmentally Friendly AMDK

Abstract

This study aims to analyze the effect of perceived value on willingness to pay a premium for environmentally friendly bottled drinking water (AMDK) products in Bali, by examining the role of environmental awareness as a mediating variable and price sensitivity as a moderating variable. This study uses a quantitative approach with an explanatory design. Data were collected through a survey of 130 bottled drinking water consumers in the Sarbagita region (Denpasar, Badung, Gianyar, and Tabanan) using purposive sampling and accidental sampling techniques. Data analysis was performed using Structural Equation Modeling based on Partial Least Squares (SEM-PLS) with the help of SmartPLS 4 software. The results showed that perceived value did not have a significant direct effect on willingness to pay a premium, but had a positive and significant effect on environmental awareness. Furthermore, environmental awareness was proven to have a positive and significant effect on willingness to pay a premium, and fully mediated the relationship between perceived value and willingness to pay a premium. Meanwhile, price sensitivity was not proven to moderate the effect of perceived value on willingness to pay a premium. These findings imply that AMDK producers need to strengthen consumers' perceived environmental value and increase environmental awareness through education and sustainable marketing communications to encourage consumers' willingness to pay premium prices for environmentally friendly products.

Downloads

Download data is not yet available.

References

Al Mamun, A., Rahman, M. K., Masud, M. M., & Mohiuddin, M. (2023). Willingness to pay premium prices for green buildings: evidence from an emerging economy. Environmental Science and Pollution Research, 30(32), 78718–78734. https://doi.org/10.1007/s11356-023-27998-9

Bhutto, M. H., Tariq, B., Azhar, S., Ahmed, K., Khuwaja, F. M., & Han, H. (2022). Predicting consumer purchase intention toward hybrid vehicles: testing the moderating role of price sensitivity. European Business Review, 34(1), 62–84. https://doi.org/10.1108/EBR-10-2019-0274

Bushara, M. A., Abdou, A. H., Hassan, T. H., Sobaih, A. E. E., Albohnayh, A. S. M., Alshammari, W. G., Aldoreeb, M., Elsaed, A. A., & Elsaied, M. A. (2023). Power of Social Media Marketing: How Perceived Value Mediates the Impact on Restaurant Followers’ Purchase Intention, Willingness to Pay a Premium Price, and E-WoM? Sustainability (Switzerland), 15(6), 1–22. https://doi.org/10.3390/su15065331

Carrión Bósquez, N. G., Arias-Bolzmann, L. G., & Martínez Quiroz, A. K. (2023). The influence of price and availability on university millennials’ organic food product purchase intention. British Food Journal, 125(2), 536–550. https://doi.org/10.1108/BFJ-12-2021-1340

Durmaz, Y., & Akdoğan, L. (2024). The Effect of Environmental Responsibility on Green Consumption Intention: The Moderator Role of Price Sensitivity and the Mediator Role of Environmental Concern. A Case Study in Turkey. Environment, Development and Sustainability, 26(4), 9089–9114. https://doi.org/10.1007/s10668-023-03083-6

Farzin, M., Shababi, H., Shirchi Sasi, G., Sadeghi, M., & Makvandi, R. (2023). The determinants of eco-fashion purchase intention and willingness to pay. Spanish Journal of Marketing - ESIC, 27(3), 348–366. https://doi.org/10.1108/SJME-07-2022-0158

Ferreira, L., Oliveira, T., & Neves, C. (2023). Consumer’s intention to use and recommend smart home technologies: The role of environmental awareness. Energy, 263(PC), 125814. https://doi.org/10.1016/j.energy.2022.125814

Galati, A., Thrassou, A., Christofi, M., Vrontis, D., & Migliore, G. (2023). Exploring travelers’ willingness to pay for green hotels in the digital era. Journal of Sustainable Tourism, 31(11), 2546–2563. https://doi.org/10.1080/09669582.2021.2016777

García-Salirrosas, E. E., Escobar-Farfán, M., Gómez-Bayona, L., Moreno-López, G., Valencia-Arias, A., & Gallardo-Canales, R. (2023). Influence of environmental awareness on the willingness to pay for green products: an analysis under the application of the theory of planned behavior in the Peruvian market. Frontiers in Psychology, 14(January). https://doi.org/10.3389/fpsyg.2023.1282383

Gomes, S., Lopes, J. M., & Nogueira, S. (2023a). Willingness to pay more for green products: A critical challenge for Gen Z. Journal of Cleaner Production, 390(January). https://doi.org/10.1016/j.jclepro.2023.136092

Gomes, S., Lopes, J. M., & Nogueira, S. (2023b). Willingness to pay more for green products: A critical challenge for Gen Z. Journal of Cleaner Production, 390(July 2022). https://doi.org/10.1016/j.jclepro.2023.136092

González-Viralta, D., Veas-González, I., Egaña-Bruna, F., Vidal-Silva, C., Delgado-Bello, C., & Pezoa-Fuentes, C. (2023). Positive effects of green practices on the consumers’ satisfaction, loyalty, word-of-mouth, and willingness to pay. Heliyon, 9(10), e20353. https://doi.org/10.1016/j.heliyon.2023.e20353

Hair Jr et al. (2021). Partial least squares structural equation modeling (PLS-SEM) using R: A workbook (p. 197). Springer Nature. In Structural Equation Modeling: A Multidisciplinary Journal (Vol. 30, Issue July). https://books.google.co.id/books?id=y8JyzgEACAAJ

Hu, T., Al Mamun, A., Reza, M. N. H., Wu, M., & Yang, Q. (2024). Examining consumers' willingness to pay a premium price for organic food. Humanities and Social Sciences Communications, 11(1). https://doi.org/10.1057/s41599-024-03789-6

Huda, M., Hartati, N., Gunawan, A. I., & Luthfi, F. M. (2023). Revealing consumer attitudes towards green products: the role of environmental awareness, perceived value, and media influence on zero waste products purchase intentions. IOP Conference Series: Earth and Environmental Science, 1267(1). https://doi.org/10.1088/1755-1315/1267/1/012009

Indra Wijaya Kusuma, A. M., Riyan Putra Richadinata, K., & Winda Pratiwi, K. (2025). Kesediaan Membayar ‘Organic Food’ pada Mahasiswa Generasi Z di Kota Denpasar. Jurnal Riset Manajemen Dan Bisnis, 135–142. https://doi.org/10.29313/jrmb.v5i2.7878

Jacob, J., Vieites, Y., Goldszmidt, R., & Andrade, E. B. (2022). Expected Socioeconomic-Status-Based Discrimination Reduces Price Sensitivity Among the Poor. Journal of Marketing Research, 59(6), 1083–1100. https://doi.org/10.1177/00222437221097100

Konyalıoğlu, F. S., Küçükkelepçe, O., Kurt, O., & Bostan, Y. E. (2025). Water consumption behaviors and environmental values: A study among earthquake-affected individuals in Turkey. Acta Psychologica, 261(April). https://doi.org/10.1016/j.actpsy.2025.105880

Lavuri, R. (2022). Organic green purchasing: Moderation of environmental protection emotion and price sensitivity. Journal of Cleaner Production, 368(July), 133113. https://doi.org/10.1016/j.jclepro.2022.133113

Mahmoud, M. A., Tsetse, E. K. K., Tulasi, E. E., & Muddey, D. K. (2022). Green Packaging, Environmental Awareness, Willingness to Pay and Consumers’ Purchase Decisions. Sustainability (Switzerland), 14(23), 1–14. https://doi.org/10.3390/su142316091

Mustafa, S., Shi, Y., Adan, D. e., Luo, W., & Al Humdan, E. (2024). Role of environmental awareness & self-identification expressiveness in electric-vehicle adoption. Transportation, 861–885. https://doi.org/10.1007/s11116-024-10515-3

Ramli, Y., Imaningsih, E. S., Shiratina, A., Rajak, A., & Ali, A. J. (2022). Environmental Sustainability: To Enhance Organizational Awareness towards Green Environmental Concern. International Journal of Energy Economics and Policy, 12(4), 307–316. https://doi.org/10.32479/ijeep.13275

Sahabuddin, M., Shariful Alam, M., & Nekmahmud, M. (2024). Tourist Satisfaction, Loyalty, and Environmental Awareness? Environment, Development and Sustainability, 7817–7840.

Sayem, S. M., Islam, Z., Anushka, A. H., Jahan, N., & Rahman, M. I. (2025). What drives Generation Z's green purchases in Bangladesh? A multidimensional analysis of psychological and environmental factors. Social Sciences and Humanities Open, 12(April), 102052. https://doi.org/10.1016/j.ssaho.2025.102052

Susanti, & Nurtyastuti, T. (2025). Jurnal Ilmiah Manajemen Dan Bisnis Perspektif Perilaku dalam Niat Adopsi Financial Technology: Jurnal Ilmiah Manajemen Dan Bisnis. 26(2), 178–193.

Tjandra Rahardja, C., & Fataya, D. A. C. (2023). Green Perceived Value on Green Product Awareness and Green Satisfaction Moderated by Gender. Jurnal Akuntansi Dan Manajemen, 34(2), 73–85. https://doi.org/10.53916/jam.v34i2.101

Valencia-Arias, D. A., Martinez-Tavera, C. R., Areiza-Padilla, J. A., Barajas-Portas, K., Veas-González, I., & Manzi-Puertas, M. A. (2025). The power of centennials and their environmental awareness: Willingness to pay a premium price on the internet for sustainable fashion products. Cleaner Waste Systems, 10(February). https://doi.org/10.1016/j.clwas.2025.100221