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The Effects Of Information On Consumer Demand For Biotech Foods: Evidence From Experimental Auctions

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Author Info

  • Tegene, Abebayehu
  • Huffman, Wallace E.
  • Rousu, Matthew C.
  • Shogren, Jason F.

Abstract

Consumers' willingness to pay for food products decreases when the food label indicates that a food product is produced with the aid of modern biotechnology. This bulletin presents empirical evidence on consumers' willingness to pay for biotech foods based on the presence or absence of labels advising that the food was prepared with the aid of biotechnology. The authors designed and conducted an experimental auction to elicit consumers' willingness to pay for "genetically modified" (GM)-labeled and standard-labeled foods under different information regimes. The evidence gathered for vegetable oil, tortilla chips, and potatoes shows that labels matter. In particular, under all information treatments, consumers discounted food items labeled "GM" by an average of 14 percent. While gender, income, and other demographic characteristics appeared to have only a slight impact on consumers' willingness to pay for biotech foods, information from interested parties and third-party (independent) sources was found to have a strong impact.

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Bibliographic Info

Paper provided by United States Department of Agriculture, Economic Research Service in its series Technical Bulletins with number 33577.

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Date of creation: 2003
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Handle: RePEc:ags:uerstb:33577

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Related research

Keywords: Biotech; bioengineering; biotechnology; food labels; auctions; experimental economics; random nth price; willingness to pay; Demand and Price Analysis; Research and Development/Tech Change/Emerging Technologies;

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Cited by:
  1. James, Jennifer S. & Fleischer, Shelby J. & Johnson, David H. & Schwab, Bradley D. & Lord, John, 2005. "Consumer Purchases of Biotech Sweet Corn: Results from a Market Experiment," 2005 Annual meeting, July 24-27, Providence, RI 19213, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. Xue, Hong & Mainville, Denise Y. & You, Wen & Nayga, Rodolfo M., Jr., 2009. "Nutrition Knowledge, Sensory Characteristics and Consumers’ Willingness to Pay for Pasture-Fed Beef," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49277, Agricultural and Applied Economics Association.
  3. Terawaki, Taku, 2005. "Effects of Information on Consumer Risk Perception and Willingness to Pay for Non-Genetically Modified Corn Oil," 2005 Annual meeting, July 24-27, Providence, RI 19555, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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