The paper addresses two issues pertaining to the market differentiation between non-genetically modified (non-GM) and genetically modified (GM) food varieties. First, a cost-efficiency explanation is given for the discrepancy between the observed shares of identity preserved non-GM variety and the total supply of the variety. Second, the analysis shows that when products can be falsely labeled as non-GM, the share of false labeling depends on the level of identity preservation. In this context, the analysis demonstrates that the share of falsely labeled supply can increase in response to harsher fines.
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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number
2062.
Length: Date of creation: 20 Feb 2002 Date of revision: Handle: RePEc:isu:genres:2062
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