A quantitative methods study into the relationship between greenwashing and advertisement evaluation and the influencing effects of environmental concern, brand loyalty,

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“Green” Advertisements

A quantitative methods study into the relationship between greenwashing and advertisement evaluation and the influencing effects of environmental concern, brand loyalty,

and self-brand connections on this relationship

Author: Séverine de Zwaan Student number: 12321915

Date of submission: 26-06-2021

Program: BSc. Business Administration Track: Management in the Digital Age

Thesis supervisor: dr. R. de Bliek ABSTRACT

This study investigated whether environmental concern, brand loyalty, and self-brand connections influence the relationship between greenwashing information and advertisement evaluation. A quantitative method, consisting of a sample of 60 participants, was used to test the hypotheses. Specifically, an online questionnaire was distributed to gather the needed data.

The results showed that environmental concern influences the relationship between greenwashing information and advertisement evaluation. Indicating that consumers with high environmental concerns will rate advertisements more negatively when they become aware of greenwashing than consumers with low environmental concerns. However, the results did not support the hypotheses that self-brand connections and brand loyalty influence the relationship between greenwashing information and advertisement evaluation. Thus, high brand loyalty and high self-brand connections cannot act as a buffer to mitigate the adverse effects of greenwashing information on advertisement evaluation.

Keywords: Greenwashing, advertisement evaluation, brand loyalty, self-brand connections, environmental concern

Keywords: Greenwashing, advertisement evaluation, brand loyalty, self-brand connections, environmental concern

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Statement of Originality

This document is written by Severine de Zwaan who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document are original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Table of Contents

1. INTRODUCTION... 4

2. THEORETICAL FRAMEWORK ... 9

2.1 Advertisement Effectiveness & Greenwashing ... 9

2.2 Environmental Concern ... 11

2.3 Self-brand Connections ... 13

2.4 Brand Loyalty ... 14

3. METHODOLOGY ... 18

3.1 Sample ... 18

3.2 Survey Design ... 18

3.3 Variables ... 20

3.4 Control Variables ... 22

3.5 Analyses ... 24

4. RESULTS ... 26

4.1 Correlations ... 26

4.2 Hypothesis 1 ... 28

4.3 Hypothesis 2 ... 29

4.4 Hypothesis 3 ... 30

4.5 Hypothesis 4 ... 32

5. DISCUSSION ... 35

6. CONCLUSION ... 40

References ... 41

Appendix ... 46

Appendix A: List of items for each variable ... 46

Appendix B: Assumptions to test the hypotheses ... 49

Assumptions hypothesis 1. ... 49

Assumptions hypothesis 2. ... 50

Assumptions hypothesis 3. ... 53

Assumptions hypothesis 4. ... 54

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1. INTRODUCTION

In 2015, Volkswagen had marketed itself as a pioneer of the clean energy revolution. The company had spent $77 million in the American market to advertise its proclaimed green cars (Gelles, 2015). However, Volkswagen was globally under attack by the public due to accusations of installing illegal software on cars to dodge standards on diesel emissions (Ewing, 2017). Volkswagen manipulated its lab tests so that the assessment of pollutants did not represent the actual driving situation. Road tests executed by independent research organizations had shown that the Volkswagen Jetta emitted a quantity of nitrogen oxide 35 times higher than allowable legal levels for emissions (Siano et al., 2017). The budget airline Ryanair was in 2020 accused of greenwashing its advertisements. The airline stated that it had the lowest carbon emissions of any major airline. However, the advertisement got banned because the Advertising Standards Authority found it misleading, as Ryanair lacked adequate evidence to support its green advertisement claims (Sweney, 2020).

The above cases are classic examples of greenwashing scandals regarding “green”

advertisements. Greenwashing is when companies delude consumers regarding their products or services’ environmental performance or benefits (De Jong, Harkink & Barth, 2018; Delmas & Burbano, 2011).

Prior research has shown that there is a negative relationship between greenwashing information and advertisement evaluation. Namely, when consumers are conscious of greenwashing in advertisements, they will devalue the brand, and consumer trust will also decrease. Consequently, consumers will question the “green” advertisement (Majláth,

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2017). Environmental concern can be defined as the consumers’ level of engagement with environmental issues (Kwon, Englis & Mann, 2016). Majláth (2017) showed a moderating effect of environmental concern on the relationship between greenwashing information and advertisement evaluation. Namely, highly environmental concerned consumers evaluated the advertisement more negatively after receiving greenwashing information due to more intense feelings of betrayal (Majláth, 2017).

Brand loyalty is the behavioral tendency towards a particular brand and reflects consumers’ repetitive buying behavior (Sasmita & Suki, 2015). Research by Kwon, Englis, and Mann (2016) has shown that brand loyal consumers will deny the believability of greenwashing information due to biased assimilation. Biased assimilation implies that consumers consider information unbelievable when it contradicts their pre-existing cognition. Self-brand connections are “the extent to which individuals have incorporated brands into their self-concept” (Escalas & Bettman, 2003, p.340). Prior research has shown that consumers with high self-brand connections showed more positive responses to brand scandals. Namely, consumers with high levels of self-brand connections will deny negative information about a brand because it threatens their positive self-view (Cheng, White, &

Chaplin, 2012; Jeon & Baeck, 2016; Lisjak, Lee & Gardner, 2012).

However, the literature has not investigated whether self-brand connections and brand loyalty influence the relationship between greenwashing information and advertisement evaluation. This could be interesting to research since research has shown that brand loyalty and self-brand connections can mitigate the harmful effects of

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greenwashing information (Cheng, White, & Chaplin, 2012; Jeon & Baeck, 2016; Kwon, Englis, and Mann, 2016; Lisjak, Lee & Gardner, 2012). However, no study has researched to what extent these effects influence advertisement evaluation. Furthermore, although consumers are willing to pay more for green products, the lack of trust in green advertisements diminishes actual purchasing behavior (Atkinso & Kim, 2015). Therefore, it essential to investigate whether high brand loyalty and high self-brand connections can mitigate the adverse effects of greenwashing information on advertisement evaluation to diminish the lack of trust and increase purchasing behavior of green products. Hence, this research will investigate whether self-brand connections and brand loyalty influence the relationship between greenwashing information and advertisement evaluation. The results of this study will ensure that the literature gap is reduced, and valuable information is provided to managers on how they can mitigate the effects of greenwashing information on advertisement evaluation.

The research question is: “Is the negative relationship between greenwashing information and advertisement evaluation weaker for consumers with high brand loyalty, high self-brand connections, and low environmental concern?”

Figure 1. Research model

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A quantitative analysis will be performed to answer the above research question.

Specifically, the research question will be answered through the performance of a paired- samples t-test, a regression, and ANCOVA analyses in SPSS. An online questionnaire will be used to collect the appropriate data needed to execute the research. The main objective of this study is to explain advertisement evaluation, as one can also see in the research model shown in figure 1. Advertisement evaluation will be measured by asking a set of survey questions developed and tested previously by Gorn, Pham, and Sin (2001). An advertisement of Coca-Cola about its PlantBottle will be used in the survey. The other main variables of interest are greenwashing information, brand loyalty, self-brand connections, and environmental concern. Greenwashing information will be measured on the same basis as the research of Majláth (2017). Self-brand connections will be measured by asking a set of survey questions adopted from Escalas and Bettman (2003). A set of survey questions is adopted from Heitmann, Lehmann, and Herrmann (2007) to measure brand loyalty.

Environmental concern will be measured by items developed by Mohr, Eroǧlu, and Ellen (1998).

This study expects that high levels of brand loyalty and self-brand connections will weaken the relationship between greenwashing information and advertisement evaluation.

As already mentioned above, consumers with high levels of brand loyalty are less likely to believe in greenwashing information because it opposes their pre-existing cognitions and thoughts (Kwon, Englis & Mann, 2016). In addition, brand loyalty biases consumers by making them pay less attention to the truthfulness of third-party ratings regarding the greenness of a firm (Kwon, Englis & Mann, 2016). Consumers with high self-brand

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connections are also less likely to believe in greenwashing information because they will deny negative information about a company as if it was a personal attack (Cheng, White,

& Chaplin, 2012; Jeon & Baeck, 2016; Lisjak, Lee & Gardner, 2012). Thus, self-brand connections and high brand loyalty might act as a buffer for companies involved in greenwashing scandals (Cheng, White, & Chaplin, 2012; Jeon & Baeck, 2016; Kwon, Englis, and Mann, 2016; Lisjak, Lee & Gardner, 2012). Hence, brand loyalty and self- brand connections might weaken the relationship between greenwashing information and advertisement evaluation.

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2. THEORETICAL FRAMEWORK

2.1 Advertisement Effectiveness & Greenwashing

More and more companies are utilizing green advertisements to communicate about the green performance of their products or business processes. Companies engage in green advertisements to attract a growing environmentally conscious consumer market (Delmas

& Burbano, 2011; Furlow, 2010). Specifically, green advertising has increased tenfold over the past 20 years and has tripled since 2006. However, at the same time, the number of greenwashing cases has also increased significantly (Delmas & Burbano, 2011).

Companies engaging in greenwashing communicate positively about the environmental benefits of their products or services, but in reality, they lack proper environmental performance (De Jong, Harkink & Barth, 2018). Siano et al. (2017) included Corporate Social Responsibility in their definition of greenwashing and therefore adopted a broader perspective than solely focusing on the environmental performance of companies. While green advertising always comes from the company, the information about greenwashing mostly comes from direct experience or third parties such as media outlets and word of mouth (Nyilasy, Gangadharbatla, and Paladino, 2014).

Despite the growth of firms engaged in green advertisements and simultaneously the growth of companies engaged in greenwashing their advertisements, there is a lack of scholarly research in green communication (Parguel, Benoit-Moreau & Russell, 2015;

Schmuck, Matthes, & Naderer, 2018). Previous research has investigated chiefly how consumer characteristics influence green advertisement effectiveness. These consumer characteristics include consumer skepticism, ambivalence toward green advertising, topic

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knowledge, environmental awareness, consumer familiarity with the brand, and the perceived importance of the environmental issue at stake (Parguel, Benoit-Moreau &

Russell, 2015).

There are two major greenwashing types in terms of advertising. Firstly, false appeals entail that companies demonstrate false green claims based on objective evidence.

Secondly, vague appeals entail overly broad or poorly defined green claims that create an incorrect impression (Schmuck, Matthes & Naderer, 2018). Common green advertisement claims are “eco-friendly”, “green”, “earth-friendly”, “save the planet”, and “go green”.

When a company cannot fulfill its green claims, one can speak of greenwashing (Akturan, 2018). According to Nyilasy, Gangadharbatla, and Paladino (2014), green advertisements contain one or more of the following conditions: explicitly or implicitly referring to a relationship between the product or service and the biophysical environment, promotes a green lifestyle, and presenting a corporate environmental responsibility image.

When a firms’ Corporate Environmental Performance is positive, then green advertising can result in marginal higher attitudes toward a brand than general corporate advertising. However, when consumers become aware that the firm has a negative Corporate Environmental Performance, green advertising results in significantly lower brand attitudes than general corporate advertising. Thus, when a firm engages in greenwashing and consumers become aware of this, green advertisements negatively affect the company (Nyilasy, Gangadharbatla & Paladino, 2012). According to Nyilasy, Gangadharbatla, and Paladino (2012), consumers develop cognitive explanations while

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observing a firms’ green advertisement, also known as the attribution theory. For example, consumers will analyze why a company said a specific claim and whether the advertisement is truthful. When consumers assume that the green advertisement of the company is not genuine, then the effectiveness of the green advertisement to change attitudes and behavior is decreased (Leonidou & Skarmeas, 2017; Nyilasy, Gangadharbatla

& Paladino, 2014).

Research by Majláth (2017) showed that green advertisement evaluation decreased significantly when consumers received greenwashing information about the company in question. Namely, when consumers become aware that a company has greenwashed its advertisements, the consumer will reassess the brand and devalue its advertisements.

Additionally, the false or vague claims will lead to a decline in the consumers’ trust in the brand. Consequently, the consumer will no longer believe the claims made in the brands’

advertisements (Majláth, 2017). Therefore, one can assume that providing consumers with greenwashing information will negatively affect advertisement evaluation (H1).

H1: Providing consumers with greenwashing information has a negative effect on advertisement evaluation.

2.2 Environmental Concern

Environmental concerned consumers are “highly concerned about the environment, have exceptional awareness of environmental problems, and perceive the necessity of protecting the environment” (Schmuck, Matthes, & Naderer, 2018, p.131). Kwon, Englis,

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and Mann (2016) define environmental concern as the consumers’ level of engagement with environmental topics.

Research by Majláth (2017) has shown that environmental concern moderates the relationship between greenwashing information and advertisement evaluation. Consumers with high levels of environmental concern showed a higher change in advertisement evaluation when receiving greenwashing information in contrast to consumers with low levels of environmental concern (Majláth, 2017). According to Majláth (2017), there are two reasons for this effect. Firstly, highly environmentally concerned consumers find the ecological performance of a product more essential and feel more betrayed by firms engaging in greenwashing. Secondly, the evaluation of the advertisement is not good in the first place because a good ecological performance is assumed. Thus, the advertisement is initially evaluated too high due to the lack of greenwashing information (Majláth, 2017).

Kwon, Englis, and Mann (2016) also found that consumers with high environmental concerns had more negative brand greenness perceptions after they received greenwashing information from third parties. For these reasons, the following hypothesis is proposed:

H2: The relationship between greenwashing information and advertisement evaluation is influenced by environmental concerns, such that the relationship between greenwashing information and advertisement evaluation will be more negative when environmental concerns are high.

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2.3 Self-brand Connections

Self-brand connections can be defined as: “the extent to which individuals have incorporated brands into their self-concept” (Escalas & Bettman, 2003, p.340). Self-brand connections emerge when consumers have strong brand associations with a particular brand (Kemp, Childers & Williams, 2012).

This study expects that high self-brand connections diminishes the negative effect of greenwashing information on advertisement evaluation due to the following argumentation. First, Cheng, White, and Chaplin (2012) showed that consumers with high self-brand connections maintained favorable brand evaluations despite being exposed to negative information about the brand. Cheng, White, and Chaplin (2012) found that consumers with high self-brand connections are more forgiving and compassionate in their brand evaluations in the wake of a scandal. This is because the brand scandal is experienced as a direct threat to the consumers’ positive self-view. Namely, consumers with high self- brand connections have incorporated the brand into their own identity. Consequently, when the brand fails or is involved in a scandal, the consumer will deny the claims made to maintain its positive self-view since a threat to the brand is a threat to the self. Thus, consumers with high self-brand connections will evaluate the brand more favorably than consumers with low self-brand connections because they want to preserve a positive self- view (Cheng, White, & Chaplin, 2012; Jeon & Baeck, 2016; Lisjak, Lee & Gardner, 2012).

Besides, according to Escalas and Bettman (2003), self-brand connections can lead to solid brand attitudes that are not vulnerable to change. As a result, high self-brand

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connections can act as a buffer for marketer blunders, including poor advertising (Escalas

& Bettman, 2003). For these reasons, the researcher assumes that high self-brand connections can potentially diminish the negative relationship between greenwashing information and advertisement evaluation (H3).

H3: The relationship between greenwashing information and advertisement evaluation is influenced by self-brand connections, such that the relationship between greenwashing information and advertisement evaluation will be less negative when self- brand connections are high.

2.4 Brand Loyalty

The most widely used definition of brand loyalty is the following: “a deeply held commitment to rebuy or repatronize a preferred product/service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing, despite situational influences and marketing efforts having the potential to cause switching behavior” (Oliver, 1999, p.34).

One can argue that brand loyalty weakens the negative effect of greenwashing information on advertisement evaluation due to the following reasons. Firstly, research has shown that consumers with high brand loyalty will deny greenwashing claims about the brand due to biased assimilation (Kwon, Englis & Mann, 2016). Biased assimilation causes consumers to deny the validity of new information that is inconsistent with their existing beliefs. Namely, when consumers are exposed to new information that does not match their

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pre-existing beliefs, they become in a state known as cognitive dissonance. Consumers want to avoid this state of cognitive dissonance because it results in psychological discomfort. To maintain cognitive consistency and prevent the change of existing beliefs, consumers engage in behaviors such as biased assimilation. Consumers that are loyal to a brand have more favorable beliefs about the brand. Therefore, consumers with high loyalty levels will display biased assimilation. Consequently, they will not believe in greenwashing information from third parties because it contradicts their existing beliefs (Kwon, Englis & Mann, 2016). Therefore, one can argue that Majláths’ (2017) theory about the exposure of greenwashing information decreasing advertisement evaluation due to a reduction in trust is less applicable for loyal customers. Loyal customers will not believe the greenwashing information due to the processes of biased assimilation and, therefore, will not reduce the trust in the brand (Kwon, Englis & Mann, 2016). As a result, loyal consumers will evaluate the advertisement more positively than non-loyal consumers. This proposition is consistent with research showing that companies can use brand loyalty to alleviate consumers’ trust in a greenwashing scandal (Guo, Tao & Wang, 2017).

Secondly, brand loyalty can mitigate the harmful effects of greenwashing scandals on advertisement evaluation as high levels of brand loyalty enhances brand equity. Brand loyalty is one of the most important determinants of brand equity. Thus, when a brand enhances brand loyalty, brand equity also increases (Alhaddad, 2014). Brand equity can be defined as: “the differential effect of brand knowledge on consumer response to the marketing of the brand” (Keller, 1993, p.2). Research by Thaler, Herbst, and Merz (2018) has shown that high levels of brand equity can mitigate the adverse effects of brand

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scandals. Although this research did not focus on greenwashing scandals, the experiments made use of the Volkswagen scandal. Therefore, one can assume that the results of Thaler, Herbst, and Merz (2018) are also applicable in a greenwashing setting. In addition, Rea, Wang, and Stoner (2014) also found that consumers had fewer negative perceptions of high-equity brands in a product-harm crisis than low-equity brands. Consequently, high brand equity can mitigate negative consumer responses in a crisis. All in all, high brand loyalty might weaken the negative effect of greenwashing information on advertisement evaluation because high-equity brands can mitigate negative consumer responses.

Lastly, loyal consumers process negative publicity differently than non-loyal consumers. It is believed that loyal customers are more motivated to evaluate negative information actively. Loyal customers will generate counterarguments to discharge the negative information about the brand that contrasts with their positive beliefs about the brand (Dean, 2004). Research by Ahluwalia, Burnkrant, and Unnava (2000), also showed that loyal consumers committed to the brand were more likely to contradict negative information about the brand. Thus, loyal consumers will dismiss the greenwashing information and evaluate the advertisement more positively than consumers with low loyalty. However, research has also shown that greenwashing practices might undermine brand loyalty because consumers feel betrayed and lose faith in the company (Xiao et al., 2021). Therefore, it is vital to execute this research since there are contradictory findings.

Based on the above arguments, the researcher has formulated the following hypothesis:

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H4: The relationship between greenwashing information and advertisement evaluation is influenced by brand loyalty, such that the relationship between greenwashing information and advertisement evaluation will be less negative when brand loyalty is high.

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3. METHODOLOGY

3.1 Sample

The hypotheses will be examined with quantitative data collected through an online survey. Participants were recruited through LinkedIn and the personal connections from the researcher. A total of 63 people has completed the online survey. However, three influential outliers have been removed to satisfy the no outliers assumption in hypothesis 2 to perform the linear regression. Thus, the final sample size consists out of 60 cases. The average age of the participants was 41.50 years (SD = 15.55), with a minimum age of 16 years and a maximum age of 67 years. The sample is composed out of 33 male participants and 27 female participants. The majority (85%) of the participants currently reside in the Netherlands. Lastly, nearly half (46.7%) of the sample possesses a masters’ degree.

3.2 Survey Design

The real-life case of Coca-Cola is utilized to construct the survey. In 2013 the Danish consumer ombudsman declared Coca-Cola guilty of greenwashing its advertisements about its plant-based bottle, which debuted in 2009 (van der Hoeven, 2013).

Coca-Cola claimed the PlantBottle consists of 30 percent out of plant materials. In addition, the company claimed that the PlantBottle is environmental-friendly compared to traditional bottle packaging. Besides, Coca-Cola stated that it was reducing the companies carbon footprint with the adaptation of the PlantBottle (Ettinger, 2018). However, when asked for evidence of its green claims, Coca-Cola did not want to release the Life Cycle Assessment (LCA) of the PlantBottle (van der Hoeven, 2013). The Danish consumer ombudsman stated that Coca-Cola had exaggerated the environmental benefits of the PlantBottle as the

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company did not want to provide any proof (Ettinger, 2018). The company initially claimed that the PlantBottle saved up to 25 percent of CO2 emissions, but after the greenwashing scandal, they readjusted the percentage to 7.5 (van der Hoeven, 2013). One can see from the two Coca-Coca advertisements presented in figure 2 and 3 that the word “plant”, excessive presentation of green, and the circular-arrow logo, which represents recyclability, is used in both advertisements (Lanthorn, 2013). Besides, it is not the first time that Coca-Cola was under attack for unverifiable claims. Namely, Coca-Cola received a Polaris Institute Greenwashing Award because it released false allegations that it had reduced its water usage by 4 percent to diminish its water footprint (Lyon & Montgomery, 2015).

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3.3 Variables Brand Loyalty

Brand loyalty is measured through five items developed by Heitmann, Lehmann, and Herrmann (2007). The items can be found in Appendix A. The items are measured on 9-point scales ranging from 1 = “strongly disagree” to 9 = “strongly agree”. Higher scores mean more loyalty, while lower scores mean less loyalty. The Cronbach’s Alpha is .743, indicating that the items have a relatively high internal consistency. As one can see from descriptives table 1, brand loyalty has a mean of 5.98 (SD = 1.80). The mean of 5.98 indicates that the participants were, on average, relatively loyal to Coca-Cola.

Self-brand Connections

The 7-items to measure self-brand connection are adopted from Escalas and Bettman (2003), which has been validated extensively. One can find the items in Appendix A. The items of self-brand connection are measured on a 7-point Likert scale ranging from 1 = “strongly disagree” to 7 = “strongly agree” (Rindfleisch, Burroughs & Wong, 2009).

Higher scores indicate higher levels of self-brand connections, while lower scores indicate lower levels of self-brand connections. The Cronbach’s Alpha of the seven items is .896.

Thus, the scale shows sufficient reliability. From descriptives table 1, one can see that the average level of self-brand connections is relatively low for Coca-Cola (M = 2.20, SD = 1.03).

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Advertisement Evaluation

Advertisement evaluation is measured through items previously developed by Gorn, Pham, and Sin (2001). The statements, which can be found in Appendix A, are measured on a 7-point semantic differential scale. Participants who scored higher evaluated the advertisement better. The same items were used to measure advertisement evaluation before and after respondents received greenwashing information. Participants needed to evaluate the advertisement in figure 3. The following information was provided with the first evaluation of the advertisement: “The PlantBottle is the world’s first fully recyclable plastic bottle partially made from plants. With this PlantBottle Coca-Cola tries to reduce its total packaging waste and combat climate change.”.

Cronbach’s Alpha of advertisement evaluation before participants received greenwashing information is .86. Cronbach’s Alpha of advertisement evaluation after participants received greenwashing information is .915. Both Cronbach’s Alphas suggest relatively high internal consistencies between the items. As expected, and shown in descriptives table 1, participants evaluated the advertisement more negatively after receiving greenwashing information about Coca-Cola. Namely, the mean before greenwashing information is 5.28 (SD = 1.00), and after greenwashing information, the mean is 3.40 (SD = 1.50).

Greenwashing Information

The greenwashing information provided to respondents participating in the survey can be found in Appendix A. Advertisement evaluation of Coca-Colas' PlantBottle (Figure

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3) was first measured without prior knowledge of greenwashing information. Further in the survey, respondents received the corresponding greenwashing information, and they needed to evaluate the "green" advertisement again. As a result, the researcher can analyze the difference in advertisement evaluation before and after respondents received greenwashing information.

Environmental concern

Environmental concern is measured through five semantic differential items developed by Mohr, Eroǧlu, and Ellen (1998). The items are measured on seven-point scales. The 5-items can be found in Appendix A. Participants that scored higher showed higher levels of environmental concern. Cronbach’s Alpha of environmental concern is .933, indicating a relatively high internal consistency between the five items. Lastly, descriptives table 1 demonstrates that the participants showed, on average, high environmental concerns (M = 6.28, SD = 0.82).

3.4 Control Variables

Perceived Consumer Skepticism

Perceived consumer skepticism can be defined as the distrustful perception of consumers about advertisements because of the occurrence of misleading green claims (Matthes & Wonneberger, 2014). Although Majláth (2017) did not find a significant effect of perceived consumer skepticism moderating the relationship between greenwashing information and advertisement evaluation, the researcher has chosen to include it as a

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potential control variable. Namely, consumer skepticism is a widely accepted concept in the greenwashing literature (Matthes & Wonneberger, 2014).

Perceived consumer skepticism is measured on a 3-item scale adopted by Aji and Sutikno (2015). The items, which are also shown in Appendix A, are measured on a 5- point Likert scale ranging from 1 = “strongly disagree” to 5 = “strongly agree”. Participants who scored higher show higher levels of skepticism. Perceived consumer skepticism has a Cronbach Alpha of .746. Thus, the scale shows sufficient internal consistency. As shown in descriptive table 1, the participants were on average relatively skeptical regarding green advertisements (M = 2.92, SD = 0.76)

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Table 1

Descriptive Statistics for the variables in the study

and Cronbach's Alpha

Variable n M SD min max Cronbach's

Alpha 1. Ad evaluation prior greenwashing

information 60 5.28 1.00 3.00 7.00 .86

2. Ad evaluation after greenwashing

information 60 3.40 1.50 1.00 7.00 .92

3. Difference in advertisement

evaluation 60 1.88 1.83 -1.17 6.00 NA

4. Brand loyalty 60 5.98 1.80 1.80 9.00 .74

5. Self-brand connections 60 2.20 1.03 1.00 4.43 .90 6. Environmental concern 60 6.28 0.82 4.20 7.00 .93 7. Perceived consumer skepticism 60 2.92 0.76 1.33 4.33 .75

8. Locationᵃ 60 0.85 0.36 NA NA NA

9. Genderᵇ 60 0.45 0.50 NA NA NA

10. Ageᶜ 42 41.50 15.55 16 67 NA

11. Education 60 4.77 1.59 2 7 NA

N = 60.

ᵃ0 = other and 1 = Netherlands.

ᵇ0 = male and 1 = female.

ᶜAge was measured in years.

3.5 Analyses

The data analyses will start with a correlation table, which gives information on the associations between the variables of interest and checks for multicollinearity.

Subsequently, to analyze the change in advertisement evaluation when consumers receive greenwashing information, a paired-samples t-test will be performed (H1). Next, a

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regression analysis will be performed to test whether the relationship between greenwashing information and advertisement evaluation is influenced by environmental concern (H2). Lastly, the influence of brand loyalty and self-brand connections on the relationship between greenwashing information and advertisement evaluation will be tested through ANCOVA analyses (H3 & 4).

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4. RESULTS

4.1 Correlations

As shown in table 2, environmental concern and advertisement evaluation prior greenwashing information are positively associated. The two variables are weakly correlated, r(58) = .28, p < .05. Environmental concern and the difference in advertisement evaluation are also positively associated. Environmental concern and the difference in advertisement evaluation are weakly correlated, r(58) = .27, p < .05. For this reason, environmental concern will be included as a control variable to test hypotheses 3 and 4.

Table 2 shows a positive association between the difference in advertisement evaluation and advertisement evaluation prior greenwashing information. The two variables are moderately correlated, r(58) = .57, p < .01. The difference in advertisement evaluation is negatively associated with advertisement evaluation after greenwashing information. The two variables are strongly correlated, r(58) = -.84, p < .01.

The predictor variables self-brand connections and brand loyalty are moderately correlated, r(58) = .52, p < .01. However, there is no question of multicollinearity because the correlation coefficient is below 0.7. Thus, the correlations matrix indicates no concerns for multicollinearity.

The possible control variables, perceived consumer skepticism, location, gender, age, and education, have no significant correlation with the dependent variable, the difference in advertisement evaluation. Therefore, the possible control variables are not included during the analyses

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Table 2

Correlations for the variables in the study

N = 60.

ᵃ0 = other and 1 = Netherlands.

ᵇ0 = male and 1 = female.

ᶜAge was measured in years.

* p < .05. ** p < .01.

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4.2 Hypothesis 1

A paired-samples t-test was conducted to test the change in advertisement evaluation when participants become aware of greenwashing practices (H1). There were a few assumptions that needed to be met before executing a paired-samples t-test. Appendix B shows that all the assumptions were satisfied.

As can be derived from table 3, the paired-samples t-test was found to be statistically significant, t(59) = 7.95, p < .001. The null hypothesis, which assumes no differences in means, is rejected. Thus, the results demonstrate that there is a statistically difference between the means of advertisement evaluation. The effect size for this analysis (d = 1.83) was found to exceed Cohen’s (1988) convention for a large effect (d = 0.80).

The large effect size implies the practical significance of the results.

The results indicate that there is a difference in means in such a way that the advertisement is rated more poorly after respondents received greenwashing information.

Namely, the mean of the initial advertisement evaluation is 5.28 (SD = 1.00), and after participants received greenwashing information, the advertisement evaluation mean decreased to 3.40 (SD = 1.50). In other words, greenwashing information harms advertisement evaluation. In conclusion, hypothesis 1, which stated that greenwashing information would have a negative effect on advertisement evaluation, is not rejected based on these results.

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Table 3

Paired samples t-test results

t df p M SD SE Cohen's

d Advertisement

evaluation 7.954 59 <.001 1.88 1.83 .24 1.83

N = 60.

4.3 Hypothesis 2

In order to test hypothesis 2, which states that the relationship between greenwashing information and advertisement evaluation is influenced by environmental concern, a linear regression was performed. The researcher first verified whether the assumptions of linear regression hold for this specific dataset. Appendix B shows that all the assumptions are met after the removal of three influential outliers.

The regression results showed that environmental concern significantly predicted the difference in advertisement evaluation scores, b = 0.60, t(58) = 2.10, p = .04. The regression model is statistically significant because the p-value of .04 is below the significance level of .05. Thus, the null hypothesis is rejected. The unstandardized slope of 0.60 (SE = 0.28) indicates that the difference in advertisement evaluation increases with 0.60 for each unit increase of environmental concern. In addition, 7% of the difference in advertisement evaluation variance is explained by environmental concern, R2 = 0.07, F(1, 58) = 4.40, p = .04.

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The results suggest that the difference in advertisement evaluation increased when participants are more concerned about the environment. In other words, participants with higher levels of environmental concern rated the advertisement for the second time more negatively when they received greenwashing information than participants with lower environmental concerns. In conclusion, hypothesis 2 is not rejected by the results, which implies that environmental concern influences the relationship between greenwashing information and advertisement evaluation in such a way that the relationship between greenwashing information and advertisement evaluation will be more negative when environmental concerns are high.

Table 4

Regression results

B SE B t p F

Environmental concern 0.60 .28 2.10 .04 4.40

N = 60.

R Squared = 0.07.

DV = the difference in advertisement evaluation.

4.4 Hypothesis 3

An ANCOVA analysis was conducted to test hypothesis 3, which states that self- brand connections influence the relationship between greenwashing information and advertisement evaluation. An ANCOVA instead of a linear regression was performed because the assumption of linearity was violated. In addition, environmental concern has been incorporated as a covariate variable because environmental concern has a significant

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influence on the difference in advertisement evaluation (H2). Finally, the assumptions to perform an ANCOVA have been verified and can be found in Appendix B.

In order to perform an ANCOVA analysis, a categorical variable has been made for self-brand connections. The variable initially was categorized in “low”, “medium”, and

“high” levels. However, the researcher has made two categories because the “high”

category consisted of zero participants. First, an average score between 1 and 2.71 has been categorized as “low”. Second, an average score between 2.72 and 4.43 has been categorized as “high”.

The ANCOVA results demonstrate that the covariate, environmental concern, significantly affects the difference in advertisement evaluation, F(1, 57) = 4.31, p = .042.

Namely, the p-value of .042 is below the significance level of .05. Hypothesis 2 also showed that environmental concern influences the difference in advertisement evaluation.

As can be derived from table 5, the level of self-brand connections has no significant effect on the difference in advertisement evaluation after controlling for environmental concern, F(1, 57) = 0.29, p = .59. Therefore, the researcher fails to reject the null hypothesis.

The results suggest that the different levels of self-brand connections do not influence the difference in advertisement evaluation. In other words, high levels of self- brand connections cannot mitigate the adverse effects of greenwashing information on advertisement evaluation. In conclusion, hypothesis 3, which stated that the relationship between greenwashing information and advertisement evaluation is influenced by self-

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brand connections such that the relationship between greenwashing information and advertisement evaluation will be less negative when self-brand connections are high, is rejected based on the results.

Table 5

ANCOVA results

df F p

Self-brand connections 1 0.29 .591

Environmental concern 1 4.31 .042

N = 60.

R Squared = .08.

Adjusted R Squared = .04.

DV = the difference in advertisement evaluation.

4.5 Hypothesis 4

An ANCOVA analysis was conducted to determine a statistically significant difference between the different levels of brand loyalty on the difference in advertisement evaluation controlling for environmental concern. Environmental concern has been included as a covariate variable because the results of hypothesis 2 indicate that environmental concern significantly influences the dependent variable, the difference in advertisement evaluation. An ANCOVA was executed instead of a linear regression due to the violation of the linearity assumption. Before the performance of an ANCOVA, several assumptions needed to be verified. An overview and the verification of these assumptions can be found in Appendix B.

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In order to perform the ANCOVA, a categorical value has been made for brand loyalty. An average score between 1 and 3 has been categorized as “low” brand loyalty.

An average score between 4 and 6 has been categorized as “medium” brand loyalty. Lastly, an average score between 7 and 9 has been defined as “high” brand loyalty.

Table 6 shows that the covariate, environmental concern, has a significant effect on the difference in advertisement evaluation, F(1, 56) = 4.40, p = .041. Namely, the p-value of .041 is below the significance level of .05. These results are in line with the results of hypothesis 2. The ANCOVA analysis results show a non-significant effect of brand loyalty on the difference in advertisement evaluation after controlling for environmental concern, F(2, 56) = 0.18, p = .838. For this reason, the researcher fails to reject the null hypothesis.

The results suggest that the different levels of brand loyalty do not influence the dependent variable, the difference in advertisement evaluation. In other words, brand loyalty does not mitigate the negative effects of greenwashing information on advertisement evaluation. In conclusion, hypothesis 4, which stated that the relationship between greenwashing information and advertisement evaluation is influenced by brand loyalty such that the relationship between greenwashing information and advertisement evaluation will be less negative when brand loyalty is high, is rejected based on these results.

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Table 6

ANCOVA results

df F p

Brand loyalty 2 0.18 .838

Environmental concern 1 4.40 .041

N = 60.

R Squared = .08.

Adjusted R Squared = .03.

DV = the difference in advertisement evaluation.

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5. DISCUSSION

This study aimed to examine whether brand loyalty, environmental concern, and self-brand connections influence the relationship between greenwashing information and advertisement evaluation.

The results lend support for the first hypothesis, which states that there is a negative relationship between greenwashing information and advertisement evaluation. This indicates that green advertisements are rated more negatively by consumers who are aware of greenwashing than consumers who are not aware of the greenwashing practices. The results also support the second hypothesis, which states that the relationship between greenwashing information and advertisement evaluation is influenced by environmental concerns. Suggesting that consumers with high environmental concerns evaluate the green advertisement more negatively when they become aware of greenwashing practices than consumers with lower environmental concerns. The results did not lend support for the third hypothesis, which states that the relationship between greenwashing and advertisement evaluation is influenced by self-brand connections. Lastly, the results did not support the fourth hypothesis, which states that the relationship between greenwashing information and advertisement evaluation is influenced by brand loyalty. Thus, neither self- brand connections nor brand loyalty can mitigate the harmful effects of greenwashing information on advertisement evaluation.

The results of hypothesis 1 are in line with the results of Majláth (2017). Namely, both studies suggest that greenwashing information has a negative effect on advertisement

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evaluation. The results of hypothesis 1 also support Nyilasy, Gangadharbatla, and Paladino (2012). Nyilasy, Gangadharbatla, and Paladino (2012) stated that green advertisements could negatively affect a company when consumers become aware that the company is engaging in greenwashing. The current study showed that companies are negatively affected because of a significant decrease in advertisement evaluation. In addition, the second hypothesis is in line with the study of Majláth (2017). The results of both studies indicate that the relationship between greenwashing information and advertisement evaluation is influenced by environmental concern in such a way that the relationship becomes more negative when consumers show higher levels of environmental concern.

The current research adds value to the current literature by enhancing the external validity of Majláth (2017). In Majláth (2017), the sample consists of students from Westphalian University of Applied Sciences, Bocholt, Germany. In this research, the average age is 41.50 years (SD = 15.55). Thus, this study verified that the results of Majláth (2017) also hold for an older population. In addition, Majláth (2017) used H&M and The Bodyshop advertisements to test the hypothesis. H&M sells clothes, and The Bodyshop sells cosmetics, skincare, and perfume products. In this study, Coca-Cola was used, which is a beverage company. Thus, therefore the results of Majláth (2017) also apply to the beverage industry.

The results of hypothesis 3 are not in line with Escalas and Bettman (2003).

Namely, the results did not show any support that high levels of self-brand connections can act as a buffer for marketer blunders, including poor advertising. The results of hypothesis

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3 also did not match with the research of Cheng, White, and Chaplin (2012) because there was no evidence that consumers with high self-brand connections maintained favorable evaluations despite being exposed to negative information about the brand. A possible explanation for a non-significant result of hypothesis 3 might be because the measurement items are not well suited for the beverage product category. Namely, statements such as “I use Coca-Cola to communicate who I am to other people.” and “I think Coca-Cola helps me become the type of person I want to be.”, might be more suitable for different product categories. Therefore, it might be interesting for future research to perform the current study again using advertisements from different product categories which are more suited for the measurement items of self-brand connections.

The results of hypothesis 4 are not in line with Dean (2004) because the results did not indicate that loyal consumers discharge negative information about a brand since the difference in advertisement evaluation was not affected by brand loyalty. In addition, the results of hypothesis 4 did not match the results of Kwon, Englis, and Mann (2016).

Namely, the study results did not show any evidence that loyal consumers will deny greenwashing information since the difference in advertisement evaluation was not influenced by brand loyalty. A possible explanation for the rejection of hypothesis 4 could be a lack of variance in the data since the “low” group only consisted of 2 cases. Lastly, according to Kwon, Englis, and Mann (2016), consumers with high loyalty levels will display biased assimilation and consequently will not believe in greenwashing information from third parties because it contradicts their existing beliefs. The non-significant result of hypothesis 4 might be caused by the fact that people evaluated the advertisement

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immediately after receiving the greenwashing information. As a result, not enough time was left for the process of biased assimilation to occur.

A limitation of the current study is that we do not know whether the results also hold for the long term. There is a possibility that consumers forget about the greenwashing information or forgive the company when it deals with the situation appropriately. As a result, advertisement evaluation might increase again over the long term. Therefore, it might be interesting for future research to study the effects in the long term.

A practical implication for managers is that they need to prevent the greenwashing of green advertisements to maintain high levels of advertisement evaluation. The current study has shown that greenwashing information negatively affects advertisement evaluation. In addition, the results also showed that this relationship is even more negative for consumers with high levels of environmental concern. Research has stated that there is a growing trend of environmentally conscious consumers (Delmas & Burbano, 2011;

Furlow, 2010). Thus, the negative effect of greenwashing on advertisement evaluation is becoming worse for companies since consumers are becoming more concerned about the environment. This study has also shown that high brand loyalty and high self-brand connections cannot protect a companies’ advertisement evaluation during a greenwashing scandal. Therefore, a company must not engage in the greenwashing of its advertisements because high brand loyalty and high self-brand connections cannot mitigate the adverse effects on advertisement evaluation. All in all, managers should keep the results in mind while developing “green” advertisements.

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In conclusion, the negative relationship between greenwashing information and advertisement evaluation is weaker for consumers with low environmental concerns. In addition, the results of this research did not suggest that the negative relationship between greenwashing information and advertisement evaluation is weaker for consumers with high brand loyalty and high self-brand connections.

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6. CONCLUSION

Previous research has not investigated whether brand loyalty and self-brand connections can act as a buffer to maintain positive advertisement evaluations during a greenwashing scandal. Therefore, the present study examined the effect of brand loyalty and self-brand connections on the relationship between greenwashing information and advertisement evaluation. Results showed that greenwashing information negatively affects advertisement evaluation. The results also showed that environmental concern influences the relationship between greenwashing information and advertisement evaluation. However, the results did not show any evidence that the relationship between greenwashing information and advertisement evaluation is influenced by brand loyalty and self-brand connections. Thus, high levels of brand loyalty and self-brand connections cannot mitigate the negative effects of greenwashing information on advertisement evaluation. In conclusion, managers should not engage in the greenwashing of their advertisements because neither high brand loyalty nor high self-brand connections will protect them from the harmful effects on advertisement evaluation.

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Appendix

Appendix A: List of items for each variable Variable (Adopted from)

1. Perceived Consumer Skepticism (Aji & Sutikno, 2015)

• Most green claims in advertising are intended to mislead rather than to inform customers.

• I do not believe most green claims made in advertising.

• Because green claims are so exaggerated, consumers would be better off if such claims in advertising were eliminated.

2. Perceived Environmental Concern (Mohr, Eroǧlu & Ellen, 1998)

• I believe that environmental issues are unimportant - important

• I believe that environmental issues are something that does not really matter to me - … really matters to me

• I believe that environmental issues are not personally relevant - personally relevant

• I believe that environmental issues are uninvolving - involving

• I believe that environmental issues are of little concern to me - of great concern to me

3. Brand Loyalty (Heitmann, Lehmann, and Herrmann, 2007)

• It is very likely that I would purchase Coca-Cola again.

• I am willing to pay a price premium over competing products to be able to purchase Coca-Cola again.

• I would only consider purchasing Coca-Cola again, if it would be substantially cheaper. (R)

• Commercials regarding competing brands are not able to reduce my interest in buying Coca-Cola again.

• I would purchase Coca-Cola again, even if it receives bad evaluations by the media or other people.

4. Self-brand Connections (Escalas & Bettman, 2003)

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• Coca-Cola reflects who I am

• I can identify with Coca-Cola.

• I feel a personal connection to Coca-Cola.

• I use Coca-Cola to communicate who I am to other people.

• I think Coca-Cola helps me become the type of person I want to be.

• I consider Coca-Cola to be “me” (it reflects who I consider myself to be or the way that I want to present myself to others)

• Coca-Cola suits me well.

5. Advertisement Evaluation (before greenwashing information) (Gorn, Pham &

Sin, 2001)

• The advertisement is unpleasant - pleasant

• The advertisement is bad - good

• I dislike - like the advertisement

• I react unfavorably - favorable to the advertisement

• I feel positive - negative to the advertisement (R)

• The advertisement is not fun to read - fun to read

6. Greenwashing information (Ettinger, 2018; van der Hoeven, 2013)

In 2013 the Danish consumer ombudsman declared Coca-Cola guilty of greenwashing its advertisements about its plant-based bottle, which debuted in 2009. The company claimed that the PlantBottle is environmental-friendly compared to traditional bottle packaging. Besides, Coca-Cola stated that it was reducing the companies carbon footprint with the adaptation of the PlantBottle. However, when asked for evidence of its green claims, Coca-Cola did not want to release the Life Cycle Assessment (LCA) of the PlantBottle. The Danish consumer ombudsman stated that Coca-Cola had exaggerated the environmental benefits of the PlantBottle as the company could not provide any proof. The company initially claimed that the PlantBottle saved up to 25 percent of CO2 emissions, but after the greenwashing scandal, they readjusted the percentage to 7.5.

7. Advertisement Evaluation (after greenwashing information) (Gorn, Pham &

Sin, 2001)

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• The advertisement is unpleasant - pleasant

• The advertisement is bad - good

• I dislike - like the advertisement

• I react unfavorably - favorable to the advertisement

• I feel positive - negative to the advertisement (R)

• The advertisement is not fun to read - fun to read

*(R) = reversed score

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Appendix B: Assumptions to test the hypotheses Assumptions hypothesis 1.

Assumption 1: Continuous dependent variable

This assumption holds since advertisement evaluation is measured at the interval level.

Assumption 2: Independent observations

Each participant completed the online survey without interacting with the other participants. Thus, the assumption of independent observations is met.

Assumption 3: The independent variable consists of related pairs

This assumption also holds because participants evaluated the same Coca-Cola advertisement on two occasions.

Assumption 4: Normality

The Normal Q-Q plot shows that the difference in advertisement evaluation is normally distributed. In addition, the skewness is 0.53 and the kurtosis is -0.70. Suggesting a normal distribution since the skewness lies between -2 and 2 and the kurtosis is smaller than 4.

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Assumption 5: No outliers

The boxplot shows that the variable, difference in advertisement evaluation, does not contain any outliers.

All in all, the five assumptions are all met. Hence, the data can be used for the performance of a paired-samples t-test.

Assumptions hypothesis 2.

Assumption 1: The assumption of linearity

The scatterplot shows a positive linear relationship between environmental concern and the difference in advertisement evaluation.

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Assumption 2: The independence of residuals

This assumption is not a concern for cross-sectional surveys. Thus, the independence of the residuals assumption is met.

Assumption 3: Normality of residuals

The Normal P-P Plot shows that the residuals are approximately normally distributed.

Assumption 4: Homoscedasticity of residuals

The scatterplot indicates that the residuals are approximately equally spread. Therefore, the assumption holds since there is homoscedasticity.

Figure

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References

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Outline : CONCLUSION