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Should the United States Regulate Mandatory Labeling for Genetically Modified Foods?

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Author Info

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

Abstract

Public debate continues over whether the United States should regulate genetically modified (GM) foods by imposing a mandatory labeling policy. This paper develops a model that shows that a voluntary GM-labeling policy results in higher welfare than a regulated mandatory GM-labeling policy, if consumers can accurately read the signals in each market. We then develop an experiment that shows consumers behave as if they can accurately identify signals for GM foods. Our model and results support the perspective that the United States has been prudent in fending off calls for regulations demanding a mandatory GM-labeling policy.

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File URL: http://www.econ.iastate.edu/sites/default/files/publications/papers/p3814-2002-10-30.pdf
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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 10047.

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Date of creation: 30 Oct 2002
Date of revision:
Handle: RePEc:isu:genres:10047

Contact details of provider:
Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Email:
Web page: http://www.econ.iastate.edu
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Related research

Keywords: genetically modified foods; laboratory auctions; vegetable oil; tortilla chips; russet potatoes; mandatory labeling; voluntary labeling; nth-price auction;

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References

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  1. Jason F. Shogren & John A. Fox, 1996. "Consumer Preferences for Fresh Food Items with Multiple Quality Attributes: Evidence from an Experimental Auction of Pork Chops," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 916-923.
  2. Fox, John A. & Shogren, J. & Hayes, Dermot J. & Kliebenstein, James, 2003. "Cvm-X: Calibrating Contingent Values with Experimental Auction Markets," Staff General Research Papers 11935, Iowa State University, Department of Economics.
  3. Rousu, Matthew & Huffman, Wallace & Shogren, Jason F. & Tegene, Abebayehu, 2002. "The Value of Verifiable Information in a Controversial Market: Evidence from Lab Auctions of Genetically Modified Food," Staff General Research Papers 10009, Iowa State University, Department of Economics.
  4. Elizabeth Hoffman & Dale J. Menkhaus & Dipankar Chakravarti & Ray A. Field & Glen D. Whipple, 1993. "Using Laboratory Experimental Auctions in Marketing Research: A Case Study of New Packaging for Fresh Beef," Marketing Science, INFORMS, vol. 12(3), pages 318-338.
  5. David Lucking-Reiley & John A. List, 2000. "Demand Reduction in Multiunit Auctions: Evidence from a Sportscard Field Experiment," American Economic Review, American Economic Association, vol. 90(4), pages 961-972, September.
  6. Noussair, C.N. & Robin, S. & Ruffieux, B., 2002. "Do consumers not care about biotech foods or do they just not read the labels?," Open Access publications from Tilburg University urn:nbn:nl:ui:12-378702, Tilburg University.
  7. Lusk, Jayson L. & Daniel, M. Scott & Mark, Darrell R. & Lusk, Christine L., 2001. "Alternative Calibration And Auction Institutions For Predicting Consumer Willingess To Pay For Nongenetically Modified Corn Chips," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(01), July.
  8. John M. Crespi & St)phan Marette, 2001. "How Should Food Safety Certification be Financed?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 852-861.
  9. Kirchhoff, Stefanie & Zago, Angelo M., 2001. "A Simple Model Of Voluntary Vs Mandatory Labelling Of Gmos," 2001 Annual meeting, August 5-8, Chicago, IL 20540, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  10. Smith, Vernon L, 1976. "Experimental Economics: Induced Value Theory," American Economic Review, American Economic Association, vol. 66(2), pages 274-79, May.
  11. Golan, Elise H. & Kuchler, Fred & Mitchell, Lorraine, 2000. "Economics Of Food Labeling," Agricultural Economics Reports 34069, United States Department of Agriculture, Economic Research Service.
  12. Jack Knetsch & Fang-Fang Tang & Richard Thaler, 2001. "The Endowment Effect and Repeated Market Trials: Is the Vickrey Auction Demand Revealing?," Experimental Economics, Springer, vol. 4(3), pages 257-269, December.
  13. John A. List & Jason F. Shogren, 1999. "Price Information and Bidding Behavior in Repeated Second-Price Auctions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 942-949.
  14. 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.
  15. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, 03.
  16. Jayson Lusk & John Fox & T Schroeder & J Mintert & M Koohmaraie, 2001. "In-store valuation of steak tenderness," Framed Field Experiments 00186, The Field Experiments Website.
  17. Shogren, Jason F. & Margolis, Michael & Koo, Cannon & List, John A., 2001. "A random nth-price auction," Journal of Economic Behavior & Organization, Elsevier, vol. 46(4), pages 409-421, December.
  18. Carlson, Andrea & Kinsey, Jean D. & Nadav, Carmel, 1998. "Who Eats What, When, And From Where?," Working Papers 14312, University of Minnesota, The Food Industry Center.
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Citations

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Cited by:
  1. Baker, Gregory A. & Mazzocco, Michael A., 2005. "Who Should Certify the Safety of Genetically Modified Foods?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 8(02).
  2. Harrison, R. Wes & Han, Jae-Hwan, 2005. "The Effects of Urban Consumer Perceptions on Attitudes for Labeling of Genetically Modified Foods," Journal of Food Distribution Research, Food Distribution Research Society, vol. 36(02), July.
  3. Marks, Leonie A. & Kalaitzandonakes, Nicholas G. & Vickner, Steven S., 2003. "Evaluating Consumer Response to GM Foods: Some Methodological Considerations," CAFRI: Current Agriculture, Food and Resource Issues, Canadian Agricultural Economics Society, issue 04.
  4. Lusk, Jayson L. & Jamal, Mustafa & Kurlander, Lauren & Roucan, Maud & Taulman, Lesley, 2005. "A Meta-Analysis of Genetically Modified Food Valuation Studies," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 30(01), April.
  5. Hu, Wuyang & Adamowicz, Wiktor L. & Veeman, Michele M., 2004. "Decomposing Unobserved Choice Variability In The Presence Of Consumers' Taste Heterogeneity," 2004 Annual meeting, August 1-4, Denver, CO 19954, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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