GREEN PRODUCT PURCHASE DECISION: THE ROLE OF ENVIRONMENTAL CONSCIOUSNESS AND WILLINGNESS TO PAY

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VOLUME 21 ISSUE 4 DECEMBER 2023 JURNAL APLIKASI MANAJEMEN

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JAM

J u r n a l A p l i k a s i M a n a j e m e n J o u r n a l o f A p p l i e d M a n a g e m e n t

V o l u m e 2 1 I s s u e 4 D e c e m b e r 2 0 2 3

2 1 | 4 | 2 0 2 3

R e c e i v e d M a y ‘ 2 2

R e v i s e d J u n e ‘ 2 2

O c t o b e r ‘ 2 2 J u n e ‘ 2 3 A c c e p t e d A u g u s t ‘ 2 3

GREEN PRODUCT PURCHASE DECISION:

THE ROLE OF ENVIRONMENTAL

CONSCIOUSNESS AND WILLINGNESS TO PAY

Ferry Firdaus

Department of Management, Faculty of Economics and Business, Universitas Brawijaya, Indonesia

Abstract: This study aims to identify environmental consciousness and willingness to pay on the purchase decision of green products. Consumer's concern about environmental issues may not be easily translated into pro-environment behavior. Individuals with a strong belief that their environmental awareness behavior will result in something positive are more likely to engage in that behavior to support their concern for the environment. Through a survey of 263 respondents, this quantitative study finds that environmental awareness and environmental knowledge positively and significantly influence willingness to pay, and environmental attitude does not significantly influence willingness to pay. This study also finds that environmental awareness, environmental attitude, and willingness to pay positively and significantly influence green-product purchases, but environmental knowledge does not significantly influence green purchases. The study's practical contribution is that Indonesian organizations that are currently using or intend to use green product campaigns for commercial purposes can use the study's findings to better understand the ecosystem and create strategies that will increase the number of people using their green products. The study offers a new model with theoretical implications that take into account other factors that may affect consumers' decisions to make environmentally friendly purchases. Social influence, recycling participation, exposure to environmental messages through the media, and the value perceived by customers are some of the dimensions that can be added.

Keywords: Environmental Awareness, Environmental Knowledge, Environ- mental Attitude, Willingness to Pay, Purchase Decision, Green Product

CITATION

Firdaus, Ferry. 2023. Green Product Purchase Decision: The Role of Environmental Consciousness and Willingness to Pay. Jurnal Aplikasi Manajemen, Volume 21, Issue 4, Pages 1045-1060. Ma- lang: Universitas Brawijaya. DOI: http://dx.doi.org/10.21776/ub.jam.2023.021.04.14.

I N D E X E D I N

D O A J - D i r e c t o r y o f O p e n A c c e s s J o u r n a l s

S I N T A - S c i e n c e a n d T e c h n o l o g y I n d e x

D i m e n s i o n s G o o g l e S c h o l a r R e s e a c h G a t e G a r u d a

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I n d o n e s i a n O N E S e a r c h

C O R R E S P O ND I N G A U T H O R

F e r r y F i r d a u s

F a c u l t y o f E c o n o m y B u s i n e s s , B r a w i j a y a U n i v e r s i t y , I n d o n e s i a

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OPEN ACCESS

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INTRODUCTION

The environment has become the biggest issue in recent decades as nature is the source of human needs fulfillment. It provides air, water, food, medicine, aesthetics, and many more. Environme- ntal damage means the degradation of the carrying capacityofhumanlife.Environmentaldamageand pollution due to the management and production of non-eco-friendly products have begun to threa- ten human life. The use of fossil fuels and plastics, as well as soil pollution, causes greenhouse gas emissions and groundwater deficits, not to menti- on the use of hazardous chemicals in food and bev- erages, textiles, packaging, and other matters wid- ely used for household purposes.

Rath (2013) explained that green products are defined as industrial products that are produced through environmentally friendly technology and do not cause harm to the environment. Envir- onmentally friendly products are a new market potential that various companies in the world are in- tensifying. The Ministry of Industry has also esta- blished a green industry as one of the goals of industrial development, which is stated in Law Num- ber 3 of 2014 concerning Industry, which seeks to develop a green industry. The reason is that currently, the demand to produce green products is becoming an increasingly important and strategic issue in order to increase competitiveness. There are potential limits for three community actors to capture the green product market: business people, consumers, and the government. To capture green product market, there are potential limits from the three community actors: business people, consumers,andgovernment.Abusinessattitudethatisori- ented toward greater profits is a significant obsta- cle for an eco-friendly industry because it makes companies focus more on material gains than social values. The increasing public demand for green products will be a pressure point for business companies to transform themselves into entities that are more environmentally friendly and sell green products. Hence, we need to know what drives green-product purchase behavior so we can understand consumers' perspectives on the products. It is very important for marketers because, according to Chan and Lau (2002), it can help companies for- mulate appropriate strategies to develop green-product markets. Welsch and Kühling (2018) found that understanding the determinants of green-pro-

duct purchases can help remove barriers to green- product consumption. Some scholars have sugges- ted that consumers' purchase decision-making us- ually depends on their attitudes toward the environment (Schwepker and Cornwell, 1991). Accord- ing to Zelezny and Schultz (2000), as a component of a belief system, environmental consciousness refers to particular psychological aspects of people's inclination to act in ways that benefit the environment. It is a complex system of values and attitudes and is also a component of social consciousness. Environmental consciousness is presented as a multifaceted concept with cognitive, attitudinal, and behavioral components that are a part of a person's belief system (Schlegelmilch et al., 1996).

Sharma and Bansal (2013) proposed components of environmental consciousness are environmental knowledge, environmental concern or attitude, and social environment or environmental awareness.

Consumer environmental knowledge encourages eco-friendly behavior in brand selection (Yadav and Pathak, 2017) because it affects consumers' intention and behavior to buy green products (Tang et al., 2014). In addition, a consumer's environmental attitude describes a consumer's behavior that shows favorable or unfavorable behavior. Therefore, it is essential to highlight sustainable environments through consumers' attitudes toward eco-friendly brands (Ajzen, 1991). Attitude toward positive things in the environment affects consumer's attitudes in deciding to buy green products.

However, because green products have been specifically designed to include more environmental aspects, the price of green products is often more expensive than that of their counterparts. Pri- ce has become one of the main obstacles to the adoption of green products (Gadenne et al., 2011;

YadavandPathak,2017).Consumerswhoaresen- sitive to price perceive that product price is the most prominent factor that influences their purchase decision (Eze and Ndubisi, 2013). However, the effect of price on consumers' purchase decisions is more likely to vary due to their perception of the product (Victor and Bhaskar, 2017).

Asurveyonconsumerspendingonrecycled products revealed that consumers are willing to pay more for certain products, such as green-label- ed goods (Hamzaoui et al., 2010). Thus, their deci-

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1047 sion to pay a premium for green products is more

related to perceived value than to the actual price of the product (Moser, 2015). However, green products with low prices can benefit from wider market acceptance. However, there may be consumers who are willing to pay higher prices for green products because most of them may have realized that their purchase decisions can have direct positive impacts on many ecological problems (Biswas and Roy, 2015). This study examines the relationship between environmental awareness, environmental knowledge, environmental attitude, and willingness to pay for green products. It identifies the relationship between the willingness to pay for green products and the decision to buy green products.

Based on several previous studies, the existence of research gaps that have different results makes the authors examine these variables further to get an- swers about this inconsistency.

LITERATURE REVIEW Environmental Awareness

The definition of environmental awareness is the capacity of an individual to comprehend the environment's nature, processes, and problems, how much attention is paid to environmental quality, and the degree of his commitment to practic-

ing environmentally friendly conduct in daily life (Yeung, 1998). Mkik et al (2017) stated that One method to comprehend the environment's fragility and the significance of preserving it is through environmental awareness. Rahayu et al. (2017) stated that Environmentalism is the first step toward environmental awareness. It emphasizes how important it is for people to respect, protect, and pre- serve nature from anthropogenic harm generated by people.

Environmental Knowledge

A person's basic understanding of the environment includes all that can be done to try to protect the environment, including making the behavioral commitment to buy green products (Lee, 2011). Chen (2013) states that A person's ecological understanding of their surroundings is referred to as their environmental knowledge. Knowledge is a pertinent and significant concept that affects how customers gather and arrange information, how much information they utilize to make decisions, and how they assess goods and services (Har- yadi, 2009). Liu, et.al (2020) described the definition of environmental knowledge as the capacity to recognize signs, concepts, and behavioral pat- terns in the environment.

Source: Processed Data (2022)

Figure 1. Research Framework Environmental

Awarenes

Environmental Knowledge

Envronmental Attitude

Willingness to Pay

Green Product Purchase Decision

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Environmental Attitude

Sumarsono and Giyatno (2012) stated that when a person responds consistently to environmental conditions, whether positively or negative- ly, based on perception and knowledge of environmental problems (a cognitive component), feelings or emotions that arise toward the environment (an affective component), and a tendency to beha- ve or act toward the environment (a conative component), an individual develops an environmental attitude. Luo and Deng (2008) explain that an individual's opinions about environmental actions make up their environmental attitude. Environmental attitude expresses opinions regarding how humans and the environment are intertwined. Therefore, those who have a favorable attitude toward the environment are better able to recognize the detri- mental effects of their actions (Janmaimol, et.al 2019).

Willingness to Pay

Amelia(2016)statedthatWillingnesstopay is the maximum amount of money a person (consumer) is willing to pay in exchange for goods or services. This price serves as a gauge for how much potential customers value these items or services. Mankiw (2012) defines willingness to pay as a representation of the highest price a customer is willing to pay for a product. The greatest amount of money that can be paid for and used to purchase utility products is represented by the willingness to pay (Munene, 2006). Willingness to Pay has another meaning, namely people's willingness to pay according to the specified amount. Willingness to Pay is a person's willingness to pay for an environmental condition or assessment of natural resources and natural services in order to improve environmental quality (Hanley dan Spash, 1993).

Green Product Purchase Decision

Buying and using products with little environmental impact is known as "green product purchasing behavior," which is one of the pro-envi- ronmentalactivities(Mustofa,2007).Purchasebe- haviors related to green products result in the use and preference for goods that are eco-friendly and/

or made with eco-friendly materials and procedu- res (Kilbourne and Pickett, 2008). Ottman (2006) stated that purchasing green items offers several advantages, such as cost-effectiveness and effici-

ency, performance, health and safety, symbolism and prestige, and convenience. Nugrahadi (2002) stated that a green product is one that has been manufactured by marketers to be favorable to both the environment and human health. Kasali (1997) defines green products as products that don't harm people or the environment, don't squander resources, don't generate a lot of waste, and don't include animal abuse.

HYPOTHESIS DEVELOPMENT

During the last few years, there have been many efforts made to conceptualize and operation- alize "environmental awareness". Awareness is a type of belief that refers to individuals' descriptive ideas about certain things and attitudes that reflect their evaluation, feelings, and closeness with certain things or concepts (Zimmer et al., 1994). Ze- lezny and Schultz (2000) stated that environmental awareness as an element of a belief system refers to certain psychological factors associated with individuals' tendency to engage in pro-environment behaviors. As a form of social rationality, environmental awareness, however, is more relevant in the context of business organizations, and it is translated as the extent to which an organization produces goods that are beneficial to the natural environment while minimizing negative impacts on the environment (Kang and James, 2007). It is related not only to the perception and knowledge of individuals on environmental issues but also to theirbehavior.Thosewhohaveenvironmentalaw- areness show characteristics and attitudes such as strong loyalty and commitment (Law et al., 2017).

Environmental awareness is an element of individual belief that guides consumers to perform behaviors that are beneficial to the environment (Abd'- Razack et al., 2017). Using environmentally friendly items encourages people to adopt environmentally friendly ideals and views (Sharma and Ban- sal, 2013). Law et al. (2017) found that environmental awareness and environmental knowledge lead to positive changes in environmental attitudes, which subsequently affect green product consumption and purchase behavior.

Furthermore,Lawetal.(2017)revealedthat the environmental awareness of individuals, attitudes toward the environment, and green product consumption are positively correlated. Those who have environmental awareness also show charac-

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1049 teristics and attitudes such as strong loyalty and

commitment. Based on the descriptions and concepts above, the hypotheses of this research are:

H1 : Environmental awareness positively and significantly influences willingness to pay.

H2 : Environmental knowledge positively and significantly influences willingness to pay.

Attitude is a concept applied to evaluate thinking. Some research on consumer behavior found that attitude is important for purchase decisions due to the causal relationship between attitude, intention, and behavior (Hini et al., 1995). Attitude, including the one toward the environment, is also one of the most important concepts used by marketers to understand consumers. Environmental attitude is applied to determine how important it is for someone to think about environmental protec- tions and environmental health promotions (Chu- ang and Huang, 2018). Law et al. (2017) revealed that environmental attitudes are individual values toward the environment and people's perceptions about their responsibilities and roles for the environment. People will then show their psychological intention in forms of agreement, disagreement, inclusion, and exclusion of specific environmental issues. Forecasted conditions have made the definition of environmental attitude to be used as psychological intentions expressed through agreement or disagreement after assessing the environment. Environmental attitude is the first step of a person's actual behavior in protecting the environment. Environmental attitude is a "psychological tendency" that is expressed by evaluating perceptions or beliefs about the natural environment. Ba- sed on the descriptions and concepts above, the hypotheses of this research are:

H3 : Attitude toward the environment positively and significantly influences willingness to pay.

When considering the environment, knowledge increases and changes attitudes toward the environment. Environmental knowledge, as well as attitude, is assumed to be influencing purchase behavior. In their study of the relationship between environmental knowledge and environmental attitude, Bradley et al. (1999) found a significant correlation between attitude and knowledge. Es- maeilpour and Bahmiary (2017) showed that con-

sumers' environmental attitude positively and significantly affects concern for green products. Mo- reover, the relationship between them is positive, and they are changing in the same direction. Hen- ce, along with the increasing consumer's attitude toward the environment, people's concern for green products will also increase.

Consumers who are in favour of green products are those who are interested in environmental issues, and their purchase behavior is largely influ- enced by environmental problems and other environmental factors (Soonthonsmai, 2007). The pro- blem with green products is their high prices. Gre- en products are generally more expensive than regular products, while price-sensitive consumers prefercheaperalternatives(Ritteretal.,2015).Be- cause the production cost of green products is relatively higher than that of conventional products, their selling price is also generally higher. This ph- enomenon has led to increasing attention to green product management, which has stimulated interest in researching the relationship between green product initiatives and customer's willingness to buy or pay more for special products or services (Kang et al., 2012). Thus, the following hypothesis is used to explain the relationship between these variables.

H4 : Willingness to pay positively and significantly influences the purchase decision of green product.

Laroche et al. (2001) stated that several factors could influence consumers' willingness to pay more for green products; some of them are knowledge, attitude, and behavior. Attitude and behavi- orareconsideredenvironmentalawarenessandare included as predictors of willingness to pay more for environmentally friendly clothes (Lee, 2011).

Environmental awareness has an immediate effect on willingness to pay more for green products.

Kang et al. (2012) found that US hotel guests with higher environmental awareness are willing to pay more for green hotel services.

H5 : Environmental awareness positively and significantly influences the purchase decision of green product.

Environmental protection is one of the main reasonsforconsumerstobehaveinanenvironmen-

tally friendly way in their purchase decisions (Ga-

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denne et al., 2011). Two main factors influence the purchase decision of green products. The first gro- up consists of a set of factors inherent in consumers, such as environmental responsibility, knowledge, passion, and willingness to conserve resources and reduce environmental impacts (Esmaeil- pour and Bahmiary, 2017). The purchase decision of green products is defined as activities that support the existence of green companies in overcom- ing environmental problems by purchasing green products and promoting social conformity (Albay- rak et al., 2013). In addition, the decision to purchase green products is determined by values, attitudes, information, needs, stimuli, and beliefs (Ku- mar and Godeswar, 2015). Two aspects are consi- dered important in the purchase decision, one of which is internal motivation, which includes environmental responsibility, eco-friendly behavior, green experience, and environmental knowledge (Verbeke and Vermeir, 2004). Therefore, the decision to purchase green products is a reflection of consumers' concern about the environment; they take the public consequences of their consumption behavior into account and try to use their purchase decisions to bring positive changes.

According to Lee (2011), behavior that is sensitive to the environment, such as conserving natural resources, is a good indicator of the intention to buy environmentally friendly apparel products. Further, those who have a positive environmental attitude are willing to make more efforts and sacrifices for the environment (Jia et al., 2017).

Law et al. (2017) believed that environmental knowledge, attitude, responsibility, and intention are the predictors of individuals' environmental behavior. Among these factors, attitude and environmental behavior are positively correlated (Fisher etal.,2012).Therefore,environmentalattitudecan be used directly to predict consumer's purchase behavior toward green products (Gadenne et al., 2011).Basedonthedescriptionsandconceptsabo- ve, the hypotheses of this research are:

H6 : Environmental knowledge positively and significantly influences the purchase decision of green products.

Knowledge, more generally, is the compre- hension and awareness of a concept in this case,

the environment. Acquiring environmental knowledge necessitates identifying and verifying environmental issues, allowing one to translate that understanding into persuasive actions. Consumer assessment and response to any consuming behavior and activity that affects the environment, as well as the demand for environmentally friendly products, is known as environmental knowledge. (Lar- oche et al., 2001). Environmental knowledge con- tributes to environmental behavior and environmental attitude.

Environmental knowledge can also be inter- preted as information saying that a person has a reciprocal relationship with his environment. Such knowledge reveals how a person is personally responsible for his environment, which leads to his environmental behavior. Hence, the individual is aware of how his environmental behavior contrib- utes to sustainability. According to Haryanto and Budiman (2014), ecological knowledge is an individual's ability to identify and define symbols and concepts related to environmental issues. Environ- mental knowledge develops in two forms: understanding about the impact of a product on the environment and knowledge about greenly produced goods. Based on the descriptions and concepts above, the hypotheses of this research are:

H7 : Environmental attitude has a positive and in- significant influence on the purchase decision of green products.

METHOD

The data of this quantitative research the reason for using quantitative research is because the results of research analysis have relatively high accuracy and are in accordance with the rules. The population in this study is the population of Ma- lang Raya, which includes Malang City, Malang Regency and Batu City. Simple random sampling method via Google form as an effort to save paper in an environmentally friendly movement. The sa- mple in this study was collected from 263 people who filled out the questionnaire within the specified period of February 2021 - March 2021. The data analysis in this study used SmartPLS because SmartPLS has the advantage that it does not re- quire data that is normally distributed and has ac- curate results compared to SPSS.

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1051 Table 1. Definisi Operasional Variabel

Variable Indicator

Environmental Awareness (Fischer et al., 2015)

Careness Critical Responsibility Attitude toward Environment (Law et al., 2017) Knowledgeable

Understand,

Ability to read symbols Environmental Knowledge (Mostafa, 2007) Appreciate ideation

Thoughtful attitude Attitude of responsibility

Willingness to Pay (Laroche et al., 2001) Willingness to pay the same price Willingness to pay higher Willingness to cut the standard

Willingness to pay non-destructive product The Purchase Decision of Green Products (Kumar

and Godeswar, 2018)

Introduction of requirements Search for information Evaluation of alternatives The decision to purchase Conduct post-purchase

RESULTS

The respondents are 73% from Malang Ci- ty, 24.7% from Malang Regency, and the remain- ing portion is from Batu City. They are 56.3% ma- le and 40.7% female, the highest age range is 17- 25 years, and 74.1% of them are undergraduates with an income of less than IDR 2,500,000. The model of this study consists of five constructs: environmental awareness, attitude toward the environment, environmental knowledge, willingness to pay, and purchase decision.

The explanatory power of the model, or the nomological validity, was measured through the R Squared (R2) of the endogenous constructs or dependent variables; they are purchase decision of green product and willingness to pay. The R-squared values were used to assess the effect of certain independent latent variables on the dependent latent variable, i.e. whether they have a substantive effect. Table 2 shows the R-squared of the dependent constructs.

Laroche et al. (2001) stated that several factors could influence consumers' willingness to pay

more for green products; some of them are knowledge, attitude, and behavior. Purchasing decisions are defined as what to buy, whether to buy or not, when to buy, where to buy, and how to pay for it (Kotler and Armstrong, 2018). The indicators used for the purchase decision variables are the introduction of requirements, search for information, Evaluation of alternatives, the decision of purchase, and Conduct post-purchase. Table 2 shows that 76.2% of changes in the purchase decision of gre- enproductscanbeexplainedbywillingnesstopay.

In comparison, 92.3% of changes in willingness to pay can be explained by changes in environmental awareness, attitude toward the environment, and environmental knowledge.

Table 2. R-Squared

Construct R-Squared

The purchase decision of green

product 0.762

Willingness to pay 0.913

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Table 3 shows that all loading values have a high level of validity because their loading values are greater than 0.70.

Composite Reliability Testing

Another way of evaluating the outer model is considering the construct reliability of the latent

variables, which is measured using two criteria, composite reliability, and Cronbach's alpha, from the indicator block that measures the construct. A construct is declared reliable if the value of its composite reliability and the value of its Cronbach's alpha is greater than 0.70. The following is the out- put from SmartPLS.

Table 3. Loading Value

Items of Variables Loading Value

X1.1(careness) 0.887

X1.2 (critical) 0.879

X1.3 (responsibility) 0.713

X2.1 (knowledgeable) 0.775

X2.2 (understand) 0.713

X2.3 (Ability to read symbols) 0.870

X3.1 (appreciate ideation) 0.853

X3.2 (thoughtful attitude) 0.856

X3.3 (attitude of responsibility) 0.871

M1 (willingness to pay the same price) 0.845

M2 (willingness to pay higher) 0.832

M3 (willingness to cut the standard) 0.804

M4 (willingness to pay non-destructive product) 0.776

Y1 (I might buy) 0.832

Y2 (choose to buy) 0.828

Y3 (I buy even more expensive) 0.758

Y4 (I intend to buy) 0.769

Y5 (I will encourage you to buy) 0.716

Table 4. Composite reliability and Cronbach's Alpha

Variables Cronbach's Alpha Composite Reliability

The purchase decision of green product 0.840 0.887

Willingness to pay 0.831 0.888

Environmental knowledge 0.701 0.831

Attitude toward environment 0.824 0.895

Environmental awareness 0.773 0.868

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1053 Table 5. Path Coefficient and t-Statistics

Hipotesis Path Coefficient T-Statistic P-Value Result

H1 : X1 -> M 0,079 2,559 0,011 Accepted

H2 :X2 -> M 0,026 1,209 0,227 Rejected

H3 : X3 -> M 0,887 37,877 0,000 Accepted

H4 : M-> Y 0,255 2,210 0,028 Accepted

H5 : X1 -> Y 0,284 4,866 0,000 Accepted

H6 : X2 -> Y 0,606 16,920 0,000 Accepted

H7 : X3 -> Y 0,127 2,770 0,006 Accepted

Based on the table 4, the composite reliability and Cronbach's alpha values of all constructs are greater than 0.70. Thus, it can be concluded that all constructs have good reliability.

Structural (Inner) Model Testing

The structural model, also known as the inner model, describes the relationship between latent variables based on the substantive theory. The inner model can be measured by considering the structural model, which consists of the hypothesi- zed relationships among the latent constructs in a researchmodel.UsingBootstrappinginSmartPLS, standard errors, path coefficients, and t-statistical values can be obtained. With this technique, the statistical significance of the research model can be assessed by testing the hypotheses for each relationship path. The following table shows the coefficients of each hypothetical path as well as the t-statistical values.

The table 5 shows that almost all t statistics are greater than the t table, which is 1.605, except for hypothesis 2. It shows that all hypotheses are accepted except the second hypothesis. Of the sev- en proposed hypotheses, six are accepted (suppor- ted by empirical facts), and one is rejected (cannot be proven empirically).

The results of the analysis show that the estimated path coefficient value of the influence of environmental awareness on willingness to pay is 0.079, with t statistics > t table (2.559 > 1.605) and p-value of 0.011 < 0.05. The probability value (p- value) of 0.011 indicates that the probability of accepting Hnull (environmental awareness does not have any significant effect) or rejecting the Halter-

native (environmental awareness has significant effects) is 0.045. The value is smaller than the actual level that had been set, i.e. 0.05, so Hnull is rejected, and Halternative is accepted. It proves that environmental awareness positively and significantly influences willingness to pay. The estimated path coefficient value of the influence of environmental knowledge on willingness to pay is 0.026, with t statistics > t table (1.209 < 1.605) and p-value of 0.227 > 0.05. The probability value (p- value) of 0.227 indicates that the probability of rejecting Hnull (environmental knowledge does not have any significant effect) or accepting the Hal- ternative (Environmental knowledge has significant effects) is 0.024. The value is smaller than the actual level that had been set, i.e. 0.05, so Hnull is accepted, and Halternative is rejected. It proves that environmental knowledge does not significantly influence willingness to pay. The estimated path coefficient value of the influence of environmental attitude on willingness to pay is 0.887, with t statistics > t table (37.877 > 1.605) and the p-value of 0.000 < 0.05. The probability value (p-value) of 0.000 indicates that the probability of accepting Hnull (environmental attitude does not have any significant effect) or rejecting Halternative (environmental attitude has significant effects) is 0.129.

The value is smaller than the actual level that had been set, i.e. 0.05, so Hnull is rejected, and Halter- native is accepted. It proves that environmental awareness positively and significantly influences willingness to pay.

The results of the analysis show that the estimated path coefficient of the influence of willingness to pay on green-product purchases is 0.255,

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with t statistic > t table (2.210 > 1.605) and p-value of 0.028 < 0.05. The probability value (p-value) of 0.028 indicates that the probability of accepting Hnull (willingness to pay does not have any significant effect) and rejecting Halternative (willingness to pay has significant effects) is 0.014. The value is smaller than the actual level that had been set, i.e. 0.05, so Hnull is rejected, and Halternative is accepted. It proves that willingness to pay positively and significantly influences green-product purchases.

The results of the analysis show that the estimated path coefficient value of the influence of environmental awareness on the purchase decision of green products is 0.284, with the t statistics > t table (4.866 > 1.605) and p-value of 0.000 < 0.05.

The probability value (p-value) of 0.000 indicates that the probability of accepting Hnull (environmental awareness does not have any significant effect) and rejecting Halternative (environmental awareness has significant effects) is 0.009. The value is smaller than the actual level that had been set, i.e. 0.05, so Hnull is rejected, and Halternative is accepted. It proves that environmental awareness positively and significantly influences green-product purchases. The path coefficient value of the influence of environmental knowledge on green- product purchases is 0.606, with the t statistic > t table (16.980>1.605) and p-value of 0.000 < 0.05.

The probability value (p-value) of < 0.005 indicates that the probability of accepting Hnull (environmental knowledge does not have any significant effect) and rejecting Halternative (environmental knowledge has significant effects) is < 0.005. The value is smaller than the actual level that had been set, i.e. 0.05, so Hnull is rejected, and Halternative is accepted. It proves that environmental knowledge positively and significantly influences green- product purchases. The path coefficient value of the influence of environmental attitude on green- product purchases is 0.127, with the t statistic > t table (2.770 > 1.605) and p-value of 0.006 < 0.05.

The probability value (p-value) of < 0.0006 indicates that the probability of accepting Hnull (environmental attitude does not have any significant effect) and rejecting Halternative (environmental attitude has significant effects) is < 0.001. The value is smaller than the actual level that had been set, i.e. 0.05, so Hnull is rejected, and Halternative is accepted. It proves that environmental attitude po-

sitively and significantly influences green-product purchases.

DISCUSSION

Environmental Awareness

This study finds that environmental awareness and environmental attitude positively and significantly influence willingness to pay for green products. Willingness to pay is generally defined as users' willingness to give rewards (in the form of money) for the services they get. Willingness to pay is also the maximum amount that consumers will pay to enjoy quality improvements (Husted et al., 2014). Consumers with environmental awareness, attitude, and knowledge are willing to pay more for the green products they buy. This finding is in line with the findings of Karaoğlan and Duru- kan (2016). They found that consumers are willing to pay more for the use of green energy. Gan and Nuli (2018) found that environmental awareness is an essential factor influencing respondents' willingness to pay for green hotel services. Higgins et al. (2020) mentioned that willingness to pay for green products is related to consumers' knowledge abouttheenvironment,theirconservation-oriented beliefs, and higher levels of education. The information also determines the willingness of consumers to pay more for a product when they know that the product is environmentally friendly and sustainable. Wei et al. (2018) found that customers' participation increases their willingness to pay more, even when they showed lower environmental motivation and awareness. Lee (2011) also found that studentswhoaremoreenvironmentallyawaretend to be willing to pay more for environmentally friendly clothes. Laroche et al. (2001) explained that environmental attitude is a strong predictor of the willingness to pay more for green products.

Environmental Knowledge

This study finds that environmental knowledge does not significantly affect willingness to pay. This finding is in line with the finding of Lee (2011) that there is no relationship between environmental knowledge and willingness to pay more for environmentally friendly clothes. It is also con- sistentwiththefindingofLarocheetal.(2001)that eco literacy is not a good predictor of consumers' desire to spend more on green products. This phe- nomenon shows that people who have more know-

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come consumers of green products. It may be due to increased confusion among consumers about green marketing promises when they get too much information about environmental issues. For ex- ample, consumers who know more about environmental issues may not believe environmental cla- ims made by companies because they know they could be false.

Several previous studies found different results about the effect of environmental knowledge on willingness to pay. Kollmuss and Agyeman (2002) found that environmental knowledge cont- ributes to environmental attitude and environmental behavior. Li et al. (2019) also stated that environmental awareness and environmental knowledge positively influence willingness to buy green household products. It shows that the respondents of the studies above have sufficient knowledge about the environment and the impact of the use of non-green products and other destructive behavior. However, when they are faced with green products with higher prices, they refuse to buy. It can be caused by income, lifestyle, and the value of the green product itself. Other researchers also found that willingness to pay is positively and significantly related tothepurchasedecisionofgreenprod- ucts.DeMedeiros et al. (2016) stated that the perceived value of green products increases the willingness to pay.

Consumers with environmental awareness are willing to pay more for green products. This study also finds that environmental awareness, environmental knowledge, and environmental attitude are positively and significantly related to purchase decision of green products. This finding str- engthens the research of Wang and Su (2020), Pra- kashetal.(2018),andLee(2016).Consumerswith a high level of education are more concerned with environmentalissuesandhavesufficientknowled- ge about green products and green purchases (Ho- ang and Nguyen, 2013). Further, consumers who areveryenvironmentallyawarehaveapositiveatt- itude towards green purchases and are very willing to practice it in the future. Consumers with a pro- environment attitude specifically demonstrate green purchase behaviors (Harms and Linton, 2015).

Environmental Attitude

Songetal.(2019)foundthattheinfluenceof

environmental attitude and environmental awareness on green purchase behavior is positive and significant. It means that environmental attitude andenvironmentalawarenessareveryimportantin shaping green-product purchase behavior among Hong Kong youngsters. Green consumerism is the basis for green purchase decisions (Hamzaoui et al., 2010). Consumers who consider environmental issues when making purchase decisions are con- sidered to be involved in green purchases. Several researchers found that green consumers are those who evaluate products and their materials before buying them; they support environmental benefits by having fewer lethal and non-recyclable products. Lai and Cheng (2016) stated that the relationship between the desire to buy green products and green-product purchase behavior is significant.

IMPLICATIONS

This study investigates the role of various factors that represent environmental knowledge, willingness to pay and attitudes towards purchasing decisions of environmentally friendly products.

This study's conclusions have theoretical and practical implications. The study's practical contribution is that Indonesian organizations that are currently using or intend to use green product campaigns for commercial purposes can use the study's findings to better understand the ecosystem and create strategies that will increase the number of people using their green products. The study offers a new model with theoretical ramifications that take into account other factors that may affect consumers' decisions to make environmentally friendly purchases. Social influence, recycling participation, exposure to environmental messages through the media, and the value perceived by customers are some of the dimensions that can be added to be able to dig deeper into purchasing decisions for environmentally friendly products.

RECOMMENDATIONS

This research enriches the literature on marketing management concepts and theories, especi- ally those that discuss consumer behavior toward green products, which are rarely exposed. In addition, business actors can refer to this research in considering appropriate strategies related to consumer behavior. The government can also use this research to determine regional or national policies

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in an effort to reduce environmental damage. Ac- ademics can use this research as grassroots for future research on similar topics with more in-depth discussion. The government can also start instil- ling a love for the environment from an early age through the introduction of noble values by enact- ing firm and unbiased regulations so that people are accustomed to loving the environment, starting by buying green products. This research contrib- utes to the development of theory and practice related to green products, environmental values, environmental attitudes, environmental knowledge, environmental motives, willingness to pay, and purchase decisions.

Despite the benefits mentioned above, this research is still limited in several respects. First, this research is still limited to the Greater Malang area, so the findings cannot be used to describe a broadercontext,innationalscope,forexample.Si- multaneous research on a national scale will undo- ubtedly produce more beneficial results. Second, this research was conducted in Indonesia, where citizens are still not very familiar with green products as compared to plastic-based products, so bias seems to be unavoidable. This research would have probably yielded different findings had it been conducted in different countries and cultures. For further research, these limitations can be used as a conceptual or practical basis.

Companies are advised to elaborate on the consumers' side, in terms of their environmental awareness and attitude toward the environment, in order to increase the sales of green products. They can start by conducting the above-the-line and be- low-the-line campaigns to raise environmental issues, as well as by cooperating with key opinion leaders to drive consumer's opinion and interest in green products. In terms of products, companies can put 'green product' labels to strengthen their brand as an environmentally friendly one.

There are a few restrictions on this study, which could present fascinating chances for additional research. It was a cross-sectional study, to start with, that looked at what characteristics people thought would influence their propensity to purchase eco-friendly products. By including the relationships between the several elements found in this study and ongoing research on consumers' decisions to purchase environmentally friendly items, future studies can broaden the scope of this

research model. The second limitation of the study is that there are not many variables to be explored, so further research can add other variables to be explored.

CONCLUSIONS

This study examines the relationship between environmental awareness, environmental knowledge, environmental attitude, and willingness to pay for green products. It identifies the relationship between the willingness to pay for green products and the decision to buy green products. This study finds that environmental awareness and attitude toward the environment positively and significantly influence willingness to pay and that environmental knowledge does not significantly influence willingness to pay. This study also finds that environmental awareness, environmental knowledge, attitude toward the environment, and willingness to pay positively and significantly influence the purchase decision of green products. The practical contribution of this study is that the findings of this study can be utilized by Indonesian organizations that are already using or planning to use green product campaigns for commercial purposes in understanding the ecosystem better and design- ing appropriate strategies to increase the users of their green products. In terms of theoretical implications, this study proposes a new model that in- corporates additional dimensions that can influence green purchasing decisions. Social influence, recycling participation, exposure to environmental messages through the media, and the value perceived by customers are some of the dimensions that can be added.

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