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he Price is Right? Product Attachment and Price-Setting in the Sale of Handicraft Products in Southern India

(Honorable mention for Ron Burt award for outstanding student paper in Economic Sociology)
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This study investigates the price-setting behavior of artisans and traders in the wood and lacquerware craft cluster of Channapatna in India. Using 8 months of ethnographic data and a field experiment, the paper uncovers the importance of meaningful work in the context of workers facing poverty. The study finds that artisans, despite being poor, provide discounts of about 25% to foreign buyers and about 50% to Indian buyers wearing handicraft products in comparison to a baseline group of Indian buyers. These price patterns are contrasted with similarly disadvantaged, local traders, who retail the same products but instead, demand discernibly higher prices from foreign buyers.

The paper provides an explanation for these contrasting price patterns by highlighting that all workers facing poverty do not experience work identically. Artisans, who craft products with their hands from start to finish, derive meaning from selling to discerning buyers which motivates them to sacrifice profits, while traders, who merely retail these products, focus solely on the monetary gains from sale. This study makes three contributions. First, I advance the literature on meaning of work by building on two determinants of meaning, financial circumstances and task identification, to explain under what conditions, even workers facing poverty will seek meaning through work at the expense of monetary considerations. Second, by combining a field-experimental design with ethnography, the paper provides causal evidence showing that meaningful work has important market implications while ruling out dominant alternative explanations. Finally, this research informs the design of labor-market institutions in developing economies by highlighting the need for more sophisticated models of how low-income workers make sense of their work, beyond theories rooted solely in financial interests.

Research Question, Setting and Methods

While the literature on meaning of work has been extremely valuable in helping us understand how workers attach meaning to their work, we understand very little about the role that such meaning has to play in the context of developing economies that are characterized by poverty and informal labor markets. Do workers facing poverty prioritize more instrumental rewards over the desire to find purpose in work? I investigate this question in the context of the Channapatna wood and lacquerware craft cluster in Southern India. This cluster is famous for its wooden products turned on a lathe and colored using natural dyes.

See a video of the process.

A map of Southern India, showing Channapatna's location

This setting offers a number of advantages: first, in investigating a setting where one-time buyers bargain with sellers over prices in an anonymous manner, we are able to observe rich variation in pricing in the absence of reputational effects. Second, artisans do not face communal norms that influence their economic decisions since they operate independent, family-run craft businesses and sell their products in relative isolation from one another. And finally, this setting offers a comparison of artisans, who make these craft products, and traders, who merely sell these products.

I use three distinct but complementary sources of data from this setting:

  • 8 months of ethnographic fieldwork, participant observation and interviews
  • 19 page survey of over 75 establishments in the region
  • A field audit study covering about 455 transactions

Qualitative Evidence Contrast the following quite different quotes from the interviews that I conducted:

I find that artisans, who craft wooden products with their hands, have a vastly different relationship with their creative output as compared to local traders who merely retail these products. This relationship translates into very different workplace behavior for artisans as compared to traders. I document how artisans will often adopt unsafe work practices and engage in inefficient and wasteful production practices for the sake of their hand-crafted products. Traders on the other hand, seem more responsive to financial signals and market conditions in their work behavior.

Contrast the following quite different quotes from the interviews that I conducted:

When I work on the lathe, if I put on the [protective] shades [eye glasses], I am unable to see the wood as carefully [as I want to]. So no one wears them… I [...] get dust in my eyes and would fall sick. I put my finger in to take it out but sometimes cannot. Because they mix chemicals in [the wood], it's painful.


Well, the material costs are increasing, what do you do? The cost of production doesn't get adjusted [on its own], so one solution is to lower the quality of the products, buy cheaper raw just adjust and keep going . . . this is business.

Field Experiment : Design and Findings

To causally test the hypothesis that artisans' relationship with their products affects economic outcomes, I develop a field audit study. This study is motivated by the observation that artisans are so attached to their products that they will often give them away at low prices to buyers who they think will display them tastefully or appreciate them beyond the point of sale. In the study, I hired 3 sets of auditors, Indian-Baseline, Indian-Craft and International to purchase the same craft product (a pair of wooden bracelets) from 52 artisans and 25 traders in Channapatna, completing a total of 455 transactions. These auditors were all women of approximately the same age but differed in one key aspect: they signaled widely varying levels of appreciation for the craft as indicated below:

  • Indian-Craft: Indian auditors who wore craft accessories displaying a taste for handicraft
  • International: Foreign auditors who traveled from afar and would take the products back to their home countries
  • Indian-Baseline: A control group of Indian auditors
For each purchase made by each of these auditors, I recorded a host of data, including the price of the transaction. The different price patterns offered to the three groups are contrasted below.

As the data show, traders price according to buyers' willingness-to-pay for the products, charging discernibly higher prices to International auditors as compared to the Indian auditors. Artisans on the other hand react quite sharply to auditor cues that indicate a taste for the craft products. Auditors wearing craft products receive about a 50% discount while International auditors receive about a 27% discount as compared to Indian-Baseline auditors. These data combined with the qualitative evidence show quite clearly that artisans derive meaning from selling to discerning buyers, which motivates them to sacrifice profits.

If you found this preview of the paper interesting, you can read the full version here. The full paper contains additional sections including:

  • Descriptive demographic data on artisans, traders and economic data from my survey
  • A theory of work behavior building on two determinants of meaning, financial circumstances and task identification
  • Description, design and formal regression analyses from the field audit study
  • Robustness checks that examine alternate explanations for the results


A video showing wood being turned on a lathe and colored using natural dyes.