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Better Dead Than GM-Fed? Information and the Effects of Consumers' Resistance to GM-Foods in High-Income Countries

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

Abstract

This paper addressed the puzzling resistance of Presidents of southern African countries to food aid in 2002, given near certain starvation and long-term negative health effects of malnutrition of their constituents.  First, I show that NGOs led by Greenpeace and Friends of the Earth are disseminating information claiming that GM foods are dangerous to human health and are “Frankenfoods.”  Second, people in European Union countries, who are not in any danger of starvation, have strong preferences for non-GM foods, which they can easily afford.  Over the long term, however, the tastes of EU consumers matter to southern African countries because some of these countries hope to export agricultural products in the future.  GM-food aid, which most likely would contain GM-maize, is seen as a potential contaminant to native African maize varieties, and over the long term to be a threat to south African exports to the EU.  Hence, understanding resistance to GM-food in developed countries is crucial to formulation of better food policies in Africa and to sustainable development.New and important results are reported from a statistical analysis of the market characteristics that push consumers in a high-income country to resist GM foods, with an emphasis on negative information from environmental groups and third-party, verifiable information, which could neutralize misinformation.  For this study, a unique sample of adult consumers participated in laboratory (random nth price) auctions of three food products where labeling and information treatments were randomly assigned to experimental units.  A key finding is that negative GM-information supplied by environmental groups pushes some high income consumers out of the market for GM products and increases the probability that all consumers are out of the market.  However, verifiable information dampens the effectiveness of negative GM-product information.  Hence, a vocal interested source can stymie technology adoption in both rich and poor countries and increase the probability of general malnutrition and micro-nutrient deficiencies and starvation and unsustainable development in poor countries because of the failure to accept food and adopt new GM technology.

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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 10345.

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Date of creation: 07 Apr 2003
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Handle: RePEc:isu:genres:10345

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
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Web page: http://www.econ.iastate.edu
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  1. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-91, March.
  2. Hausman, J.A., 1994. "Valuation of New Goods Under Perfect and Imperfect Competition," Working papers 94-21, Massachusetts Institute of Technology (MIT), 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. Smith, Vernon L, 1976. "Experimental Economics: Induced Value Theory," American Economic Review, American Economic Association, vol. 66(2), pages 274-79, May.
  5. Fox, John A. & Hayes, Dermot J. & Shogren, Jason F., 2002. "Consumer Preferences for Food Irradiation: How Favorable and Unfavorable Descriptions Affect Preferences for Irradiated Pork in Experimental Auctions," Staff General Research Papers 5207, Iowa State University, Department of Economics.
  6. Fogel, Robert W, 1994. "Economic Growth, Population Theory, and Physiology: The Bearing of Long-Term Processes on the Making of Economic Policy," American Economic Review, American Economic Association, vol. 84(3), pages 369-95, June.
  7. Binenbaum, Eran & Pardey, Philip G. & Zambrano, Patricia & Nottenburg, Carol & Wright, Brian D., 2000. "South-North trade, intellectual property jurisdictions, and freedom to operate in agricultural research on staple crops:," EPTD discussion papers 70, International Food Policy Research Institute (IFPRI).
  8. Shogren, Jason F. & Seung Y. Shin & Dermot J. Hayes & James B. Kliebenstein, 1994. "Resolving Differences in Willingness to Pay and Willingness to Accept," American Economic Review, American Economic Association, vol. 84(1), pages 255-70, March.
  9. 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.
  10. Huffman, Wallace E. & Tegene, Abebayehu, 2002. "Public Acceptance of and Benefits from Agricultural Biotechnology: A Key Role for Verifiable Information," Staff General Research Papers 10430, Iowa State University, Department of Economics.
  11. Timothy F. Bresnahan & Robert J. Gordon, 1996. "The Economics of New Goods," NBER Books, National Bureau of Economic Research, Inc, number bres96-1.
  12. 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.
  13. 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.
  14. Michael J. Boskin, 1998. "Consumer Prices, the Consumer Price Index, and the Cost of Living," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 3-26, Winter.
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