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An Experimental Investigation of Consumer Willingness to Pay for Non-GM Foods When an Organic Option Is Present

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Author Info
Bernard, John C.
Zhang, Chao
Gifford, Katie
Abstract

This research compared bids that consumers placed on non genetically modified (GM), organic, and conventional versions of food products in order to determine if the organic market well serves those seeking to avoid GM foods. Auction experiments using potato chips, tortilla chips, and milk chocolate were conducted with 79 subjects. Bids were modeled as a function of consumer demographics using a heteroskedastic tobit regression model. Results with the non-GM attribute nested into the organic characteristic showed that the latter's marginal effects were insignificant. This suggested the potential to further develop non-GM products for consumers not willing to pay extra for the remaining organic attributes.

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File URL: http://purl.umn.edu/10226
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Publisher Info
Article provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.

Volume (Year): 35 (2006)
Issue (Month): 2 (October)
Pages:
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Handle: RePEc:ags:arerjl:10226

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Related research
Keywords: auction experiments; GM foods; organic foods; willingness to pay; Demand and Price Analysis;

References listed on IDEAS
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  1. Dimitri, Carolyn & Greene, Catherine, 2002. "Recent Growth Patterns In The U.S. Organic Foods Market," Agricultural Information Bulletins 33715, United States Department of Agriculture, Economic Research Service. [Downloadable!]
  2. Lusk, Jayson L. & Jamal, Mustafa & Kurlander, Lauren & Roucan, Maud & Taulman, Lesley, 2005. "A Meta-Analysis of Genetically Modified Food Valuation Studies," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 30(01), April. [Downloadable!]
  3. Huffman, Wallace E. & Shogren, Jason F. & Rousu, Matthew & Tegene, Abebayehu, 2003. "Consumer Willingness to Pay for Genetically Modified Food Labels in a Market with Diverse Information: Evidence from Experimental Auctions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(03), December. [Downloadable!]
    Other versions:
  4. Noussair, Charles & Robin, Stephane & Ruffieux, Bernard, 2004. "Revealing consumers' willingness-to-pay: A comparison of the BDM mechanism and the Vickrey auction," Journal of Economic Psychology, Elsevier, vol. 25(6), pages 725-741, December. [Downloadable!] (restricted)
  5. Shogren, Jason F. & Seung Y. Shin & Dermot J. Hayes & James B. Kliebenstein, 1994. "Resolving Differences in Willingness to Pay and Willingness to Accept," American Economic Review, American Economic Association, vol. 84(1), pages 255-70, March.
  6. Gregory M. Parkhurst & Jason F. Shogren & David L. Dickinson, 2004. "Negative Values in Vickrey Auctions," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 86(1), pages 222-235, 02. [Downloadable!] (restricted)
  7. Ronald Harstad, 2000. "Dominant Strategy Adoption and Bidders' Experience with Pricing Rules," Experimental Economics, Springer, vol. 3(3), pages 261-280, December. [Downloadable!] (restricted)
  8. Hallman, William K. & Hebden, W. Carl & Aquino, Helen L. & Cuite, Cara L. & Lang, John T., 2003. "Public Perceptions Of Genetically Modified Foods: A National Study Of American Knowledge And Opinion," Working Papers 18174, Rutgers University, Food Policy Institute. [Downloadable!]
  9. Govindasamy, Ramu & Italia, John, 1999. "Predicting Willingness-To-Pay A Premium For Organically Grown Fresh Produce," Journal of Food Distribution Research, Food Distribution Research Society, vol. 30(2), July. [Downloadable!]
  10. Glenn W. Harrison & Ronald M. Harstad & E. Elisabet Rutstr–m, 2004. "Experimental Methods and Elicitation of Values," Experimental Economics, Springer, vol. 7(2), pages 123-140, 06. [Downloadable!]
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  11. Jack Knetsch & Fang-Fang Tang & Richard Thaler, 2001. "The Endowment Effect and Repeated Market Trials: Is the Vickrey Auction Demand Revealing?," Experimental Economics, Springer, vol. 4(3), pages 257-269, December. [Downloadable!] (restricted)
  12. Frode Alfnes & Kyrre Rickertsen, 2003. "European Consumers' Willingness to Pay for U.S. Beef in Experimental Auction Markets," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 85(2), pages 396-405, 05. [Downloadable!] (restricted)
  13. Loureiro, Maria L. & Hine, Susan, 2002. "Discovering Niche Markets: A Comparison Of Consumer Willingness To Pay For Local (Colorado Grown), Organic, And Gmo-Free Products," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(03), December. [Downloadable!]
  14. Wallace E. Huffman, 2003. "Consumers' Acceptance of (and Resistance to) Genetically Modified Foods in High-Income Countries: Effects of Labels and Information in an Uncertain Environment," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 85(5), pages 1112-1118, December. [Downloadable!] (restricted)
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