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Economic Effects of the Consumer‐oriented Genetically Modified Products in Markets with a Labelling Regime

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  • Rim Lassoued
  • Konstantinos Giannakas

Abstract

This paper builds on the literature on the economic effects of the second‐generation, consumer‐oriented genetically modified products (GMPs). It analyses the market and welfare impacts of the introduction of these new products in markets, like the EU, that mandate the segregation and labelling of the first‐generation, producer‐oriented GMPs. Developing an empirically relevant model of heterogeneous consumers and producers, the study determines the effects of the consumer‐oriented GMPs on the markets of conventional, GM and organic products, and the welfare of consumers and agricultural producers. Analytical results indicate that the market effects of the new GMPs are case specific and depend on: (i) the consumer valuation of the quality‐enhancing attribute of the new GMP; (ii) the level of consumer aversion to GMOs; (iii) the strength of consumer preference for organic products; and (iv) the production costs and marketing margins in the different supply channels. The policy on the labelling of the first‐generation GMPs does not affect the impacts of the second‐generation GMPs on the quantities and market shares of the different products. However, it does affect their price effects and welfare implications. The introduction of consumer‐oriented GMPs under a mandatory labelling regime can result in losses for some GM consumers and all producers of the conventional product.

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  • Rim Lassoued & Konstantinos Giannakas, 2010. "Economic Effects of the Consumer‐oriented Genetically Modified Products in Markets with a Labelling Regime," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(3), pages 499-526, September.
  • Handle: RePEc:bla:jageco:v:61:y:2010:i:3:p:499-526
    DOI: 10.1111/j.1477-9552.2010.00253.x
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    1. Zinatul Zainol & Rohaida Nordin & Frank Akpoviri, 2015. "Mandatory labelling of genetically modified (GM) foods," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 15(2), pages 199-216, May.
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    3. Daniela Covino & Flavio Boccia & Immacolata Viola, 2021. "Genetically modified and socially responsible foods: A significant relationship for consumer?s preferences," RIVISTA DI STUDI SULLA SOSTENIBILITA', FrancoAngeli Editore, vol. 0(2), pages 371-383.

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