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Consumer Benefits of Labels and Bans on GMO Foods: An Emprical Analysis Using Choice Experiments

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  • Fredrik Carlsson
  • Peter Frykblom
  • Carl-Johan Lagerkvist

Abstract

Applying a choice experiment on the choice of consumer goods we show that Swedish consumers do not regard GMO food as being equivalent to conventional food. A central argument by proponents of GMO is that the end products are identical to those where GMO has not been used. That respondents in our survey disagree with this argument is supported by two observations. First, a positive significant WTP is found for a mandatory labeling policy. This result confirms previous observations that GMO food can be a credence good causing a market failure. Second, consumers are also willing to pay a significantly higher product price to ensure a total ban on the use of GMO in animal fodder. Even if scientists and politicians argue that most of today’s GMO food is indistinguishable from GMO free food, the consumers disagree.

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File URL: http://econ.appstate.edu/RePEc/pdf/wp0402.pdf
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Paper provided by Department of Economics, Appalachian State University in its series Working Papers with number 04-02.

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Date of creation: 2004
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Handle: RePEc:apl:wpaper:04-02

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  1. Hamilton, Stephen F. & Sunding, David L. & Zilberman, David, 2003. "Public goods and the value of product quality regulations: the case of food safety," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 799-817, March.
  2. Lusk, Jayson L. & Roosen, Jutta & Fox, John A., 2001. "Demand For Beef From Cattle Administered Growth Hormones Or Fed Genetically Modified Corn: A Comparison Of Consumers In France, Germany, The United Kingdom, And The United States," 2001 Annual meeting, August 5-8, Chicago, IL 20684, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. Lusk, Jayson L. & Fox, John A., 2002. "Consumer Demand For Mandatory Labeling Of Beef From Cattle Administered Growth Hormones Or Fed Genetically Modified Corn," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(01), April.
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  6. Carlsson, Fredrik & Martinsson, Peter, 2001. "Do Hypothetical and Actual Marginal Willingness to Pay Differ in Choice Experiments?: Application to the Valuation of the Environment," Journal of Environmental Economics and Management, Elsevier, vol. 41(2), pages 179-192, March.
  7. Carter, Colin A. & Gruere, Guillaume P., 2003. "International Approaches to the Labeling of Genetically Modified Foods," Choices, Agricultural and Applied Economics Association, vol. 18(2).
  8. F Alpizar & F Carlsson & P Martinsson, 2003. "Using Choice Experiments for Non-Market Valuation," Economic Issues Journal Articles, Economic Issues, vol. 8(1), pages 83-110, March.
  9. Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D., 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304, April.
  10. Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
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