Consumers' Resistance To Genetically Modified Foods In High Income Countries: The Role Of Information In An Uncertain Environment

This paper examines the market characteristics that push consumers in high income countries to resist GM foods, with an emphasis on negative information from environmental groups and third-party, verifiable information. For this study, unique data were collected from adult consumers in the United States who participated in laboratory auctions of three food types with randomly assigned labeling and information treatments. Using U.S. consumers is important because U.S. consumers are generally supportive of GM foods and free from the BSE "food scare" fears and bias towards "natural" that are hypothesized to lead Europeans to reject GM foods. Key findings are that negative GM-product information supplied by environmental groups pushes some consumers out of the market for GM products and increases the probability that all consumers are out of the market for GM-foods. Verifiable information dampens the effectiveness of negative GM-product information. An important finding is that negative information on GM foods from environmental groups, an interested source, can stymie technology adoption in both rich and poor countries, and increase the probability of malnutrition and starvation in poor countries because of both the failure to accept food aid and new GM-technology.