IDEAS home Printed from https://ideas.repec.org/a/ags/iaaeaj/177726.html
   My bibliography  Save this article

Consumption effects of genetic modification: what if consumers are right?

Author

Listed:
  • Giannakas, Konstantinos
  • Fulton, Murray

Abstract

This paper develops a model of differentiated consumers to examine the consumption effects of genetic modification (GM) under alternative labelling regimes and segregation enforcement scenarios. Analytical results show that if consumers perceive GM products as being different than their traditional counterparts, GM affects consumer welfare and, thus, consumption decisions. When the existence of market imperfections in one or more stages of the supply chain prevents the transmission of cost savings associated with the new technology to consumers, GM results in welfare losses for consumers. The analysis shows that the relative welfare ranking of.the 'no labelling' and 'mandatory labelling' regimes depends on: (i) the level of consumer aversion to GM products; (ii) the size of marketing and segregation costs under mandatory labelling; (iii) the share of the GM product in total production; and (iv) the extent to which GM products are incotTectly labelled as non-GM products. © 2002 Elsevier Science B.V. All rights reserved.

Suggested Citation

  • Giannakas, Konstantinos & Fulton, Murray, 2002. "Consumption effects of genetic modification: what if consumers are right?," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 27(2), August.
  • Handle: RePEc:ags:iaaeaj:177726
    as

    Download full text from publisher

    File URL: http://purl.umn.edu/177726
    Download Restriction: no

    References listed on IDEAS

    as
    1. Julie A. Caswell & Eliza M. Mojduszka, 1996. "Using Informational Labeling to Influence the Market for Quality in Food Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(5), pages 1248-1253.
    2. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
    3. Jill E. Hobbs & Marni D. Plunkett, 1999. "Genetically Modified Foods: Consumer Issues and the Role of Information Asymmetry," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 47(4), pages 445-455, December.
    4. Plunkett, Marni D. & Gaisford, James D., 2000. "Limiting Biotechnology? Information Problems and Policy Responses," CAFRI: Current Agriculture, Food and Resource Issues, Canadian Agricultural Economics Society, issue 01.
    5. Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-754, July/Aug..
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nielsen, Chantal Pohl & Robinson, Sherman & Thierfelder, Karen, 2002. "Trade in genetically modified food," TMD discussion papers 106, International Food Policy Research Institute (IFPRI).
    2. Konduru, Srinivasa & Kalaitzandonakes, Nicholas G. & Magnier, Alexandre, 2009. "GMO Testing Strategies and Implications for Trade: A Game Theoretic Approach," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49594, Agricultural and Applied Economics Association.
    3. Frank, Joshua, 2006. "Process attributes of goods, ethical considerations and implications for animal products," Ecological Economics, Elsevier, vol. 58(3), pages 538-547, June.
    4. Joshua Frank, 2007. "Wages and Bottlenecks: Free Trade, Ethics, and Information: Reconciling International Trade with National Ethical Standards," Papers of the Annual IUE-SUNY Cortland Conference in Economics,in: Proceedings of the Conference on Globalization and Its Discontents, pages 53-63 Izmir University of Economics.
    5. Lusk, Jayson L. & House, Lisa O. & Valli, Carlotta & Jaeger, Sara R. & Moore, Melissa & Morrow, Bert & Traill, W. Bruce, 2005. "Consumer welfare effects of introducing and labeling genetically modified food," Economics Letters, Elsevier, vol. 88(3), pages 382-388, September.
    6. Plastina, Alejandro S. & Giannakas, Konstantinos, 2007. "Market And Welfare Effects Of Mandatory Country-Of-Origin Labeling In The Us Specialty Crops Sector," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 9735, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Innes, Brian G. & Kerr, William A. & Hobbs, Jill E., 2007. "International Product Differentiation through a Country Brand: An Economic Analysis of National Branding as a Marketing Strategy for Agricultural Products," Commissioned Papers 6131, Canadian Agricultural Trade Policy Research Network.
    8. Magnier, Alexandre & Konduru, Srinivasa & Kalaitzandonakes, Nicholas G., 2009. "Market and Welfare Effects of Trade Disruptions from Unapproved Biotech Crops," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49592, Agricultural and Applied Economics Association.
    9. Joseph, Siny & Lavoie, Nathalie & Caswell, Julie A., 2014. "Implementing COOL: Comparative welfare effects of different labeling schemes," Food Policy, Elsevier, vol. 44(C), pages 14-25.
    10. Karantininis, Kostas & Hajderllari, Eliona, 2015. "Extracting the Kyoto Rents: Nitrogen Efficient GMO Rice in China," 2015 Conference, August 9-14, 2015, Milan, Italy 211831, International Association of Agricultural Economists.
    11. Giovanni Anania & Rosanna Nisticò, 2004. "Public Regulation as a Substitute for Trust in Quality Food Markets: What if the Trust Substitute cannot be Fully Trusted?," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(4), pages 681-681, December.
    12. Rim Lassoued & Konstantinos Giannakas, 2010. "Economic Effects of the Consumer-oriented Genetically Modified Products in Markets with a Labelling Regime," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(3), pages 499-526.
    13. Zhao, Li & Gu, Haiying & Yue, Chengyan & Ahlstrom, David, 2013. "Consumer welfare and GM food labeling: A simulation using an adjusted Kumaraswamy distribution," Food Policy, Elsevier, vol. 42(C), pages 58-70.
    14. Amrita Chatterjee & Arpita Ghose, 2016. "Consumer’s Acceptance towards Genetically Modified Crops and Growth of the Economy: A Theoretical Approach," Working Papers 2016-137, Madras School of Economics,Chennai,India.
    15. Hugo Groote & Clare Narrod & Simon C. Kimenju & Charles Bett & Rosemarie P. B. Scott & Marites M. Tiongco & Zachary M. Gitonga, 2016. "Measuring rural consumers’ willingness to pay for quality labels using experimental auctions: the case of aflatoxin-free maize in Kenya," Agricultural Economics, International Association of Agricultural Economists, vol. 47(1), pages 33-45, January.
    16. Hajderllari, Eliona & Karantininis, Kostas, 2011. "Genetically modified foods in vertically differentiated and vertically oligopolistic markets," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114774, European Association of Agricultural Economists.
    17. Demont, Matty & Daems, W. & Dillen, Koen & Mathijs, Erik & Sausse, C. & Tollens, Eric, 2008. "Are EU spatial ex ante coexistence regulations proportional?," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44191, European Association of Agricultural Economists.
    18. Costanigro, Marco & Lusk, Jayson L., 2014. "The signaling effect of mandatory labels on genetically engineered food," Food Policy, Elsevier, vol. 49(P1), pages 259-267.
    19. Diez, Maria Del Carmen Fernandez, 2005. "Welfare Measures and Mandatory Regulation for Transgenic Food in the European Union: A Theoretical Framework for the Analysis," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24472, European Association of Agricultural Economists.
    20. Chang, Ching-Cheng & Hsu, Shih-Hsun & Wu, Chia-Hsuan, 2004. "An Economy-Wide Analysis Of Gm Food Labeling Policies In Taiwan," 2004 Annual meeting, August 1-4, Denver, CO 19929, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    21. Merel, Pierre R. & Carter, Colin A., 2005. "The Coexistence of GM and non-GM Crops and the Role of Consumer Preferences," 2005 Annual meeting, July 24-27, Providence, RI 19512, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    22. Linda A. Toolsema, 2008. "Competition with Mandatory Labeling of Genetically Modified Products," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 164(3), pages 429-448, September.
    23. Hobbs, Jill E. & Innes, Brian G. & Uzea, Adrian D. & Zhang, Jing, 2012. "Food Quality Verifications and Consumer Trust," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 135069, Agricultural Economics Society.

    More about this item

    Keywords

    Consumer welfare; Genetic modification; Labelling; Mislabelling; Segregation costs; Food Consumption/Nutrition/Food Safety; Research and Development/Tech Change/Emerging Technologies; Dll; D82; LIS; Q13; Ql8;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:iaaeaj:177726. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: http://edirc.repec.org/data/iaaeeea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.