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Consumer benefits of labels and bans on genetically modified food - An empirical analysis using Choice Experiments

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Author Info

  • Carlsson, Fredrik

    ()
    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

  • Frykblom, Peter

    (Department of Economics, Appalachian State University)

  • Lagerkvist, Carl-Johan

    ()
    (Swedish University of Agricultural Sciences)

Abstract

Applying an experiment on the choice of consumer goods, we show that Swedish consumers do not regard genetically modified (GM) food as being equivalent to conventional food. A central argument by proponents of GM is that the end products are identical to those where GM 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 GM 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 GM in animal fodder. Even if scientists and politicians argue that most of today’s GM food is indistinguishable from GM-free food,consumers disagree.´

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File URL: http://hdl.handle.net/2077/2791
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Bibliographic Info

Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 129.

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Length: 16 pages
Date of creation: 12 Mar 2004
Date of revision:
Handle: RePEc:hhs:gunwpe:0129

Contact details of provider:
Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Keywords: choice experiment; credence good; genetically modified; random parameters logit; public good;

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References

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  1. Peter Martinsson, 2002. "Using Choice Experiments for Non-Market Valuation," EEPSEA Special and Technical Paper, Economy and Environment Program for Southeast Asia (EEPSEA) sp200205t2, Economy and Environment Program for Southeast Asia (EEPSEA), revised May 2002.
  2. 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, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 85(5), pages 1112-1118.
  3. Ian M. Sheldon, 2002. "Regulation of biotechnology: will we ever 'freely' trade GMOs?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 29(1), pages 155-176, March.
  4. 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, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 20684, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  5. Carter, Colin A. & Gruere, Guillaume P., 2003. "International Approaches to the Labeling of Genetically Modified Foods," Choices, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 18(2).
  6. Matthew C. Rousu & Wallace E. Huffman & Jason F. Shogren & Abebayehu Tegene, 2004. "Estimating the Public Value of Conflicting Information: The Case of Genetically Modified Foods," Land Economics, University of Wisconsin Press, vol. 80(1), pages 125-135.
  7. Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D., 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521788304.
  8. Jayson L. Lusk & Ted C. Schroeder, 2004. "Are Choice Experiments Incentive Compatible? A Test with Quality Differentiated Beef Steaks," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 86(2), pages 467-482.
  9. 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, Elsevier, vol. 87(3-4), pages 799-817, March.
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  11. Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, SUNY-Oswego, Department of Economics, number emetr2, Spring.
  12. Huffman, Wallace, 2003. "Consumer's Acceptance of (and Resistance to) Genetically Modified Foods in High Income Countries: Effects of Labels and Information in an Uncertain Environment," Staff General Research Papers 12255, Iowa State University, Department of Economics.
  13. 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, Southern Agricultural Economics Association, vol. 34(01), April.
  14. Kenneth E. Train, 1998. "Recreation Demand Models with Taste Differences over People," Land Economics, University of Wisconsin Press, vol. 74(2), pages 230-239.
  15. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 16(1), pages 67-88, April.
  16. 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.
  17. John M. Antle, 1999. "The New Economics of Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 81(5), pages 993-1010.
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Cited by:
  1. Onyango, Benjamin M. & Nayga, Rodolfo M., Jr. & Govindasamy, Ramu, 2005. "U.S. Consumers' Willingness to Pay for Labeling Information on Genetically Modified Foods: An Application of Choice Modeling," 2005 Annual meeting, July 24-27, Providence, RI, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 19490, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. Julie A. Caswell & Siny Joseph, 2007. "Consumer Demand for Quality: Major Determinant for Agricultural and Food Trade in the Future?," Food Marketing Policy Center Research Reports, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy 097, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
  3. Onyango, Benjamin M. & Nayga, Rodolfo M., Jr. & Govindasamy, Ramu, 2006. "U.S. Consumers' Willingness to Pay for Food Labeled 'Genetically Modified'," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, Northeastern Agricultural and Resource Economics Association, vol. 35(2), October.

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