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Consumer welfare and GM food labeling: A simulation using an adjusted Kumaraswamy distribution

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  • Zhao, Li
  • Gu, Haiying
  • Yue, Chengyan
  • Ahlstrom, David

Abstract

Genetically modified (GM) food products and their labeling have become a major policy issue with impassioned public debates. We explore the impact of different labeling regimes on consumer attitudes towards GM products and consumer welfare. Our experimental results illustrate that these consumer attitudes do not follow the Uniform distribution as has often been assumed in the literature but instead fit an adjusted Kumaraswamy distribution. If a Uniform distribution is assumed, the advantage of mandatory labeling would be exaggerated. Using an adjusted Kumaraswamy distribution our simulation results demonstrate that voluntary labeling is superior to mandatory labeling with the higher separation cost, while mandatory labeling is not necessarily better with lower separation cost. Therefore, the governments of China and other countries with similar consumer characteristics should consider voluntary labeling for GM food while encouraging innovations that reduce the price of GM food as well as controlling the opportunistic behavior of its producers so as to enhance the advantage of voluntary labeling.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:jfpoli:v:42:y:2013:i:c:p:58-70
    DOI: 10.1016/j.foodpol.2013.06.006
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    References listed on IDEAS

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    Cited by:

    1. Yan Li & David Ahlstrom, 2016. "Emotional stability: A new construct and its implications for individual behavior in organizations," Asia Pacific Journal of Management, Springer, vol. 33(1), pages 1-28, March.
    2. Li, Weiwen & Bruton, Garry D. & Filatotchev, Igor, 2016. "Mitigating the dual liability of newness and foreignness in capital markets: The role of returnee independent directors," Journal of World Business, Elsevier, vol. 51(5), pages 787-799.
    3. Steven Si & Xuebao Yu & Aiqi Wu & Shouming Chen & Song Chen & Yiyi Su, 2015. "Entrepreneurship and poverty reduction: A case study of Yiwu, China," Asia Pacific Journal of Management, Springer, vol. 32(1), pages 119-143, March.
    4. Michael Young & Terence Tsai & Xinran Wang & Shubo Liu & David Ahlstrom, 2014. "Strategy in emerging economies and the theory of the firm," Asia Pacific Journal of Management, Springer, vol. 31(2), pages 331-354, June.
    5. Yan Li & Fiona Yao & David Ahlstrom, 2015. "The social dilemma of bribery in emerging economies: A dynamic model of emotion, social value, and institutional uncertainty," Asia Pacific Journal of Management, Springer, vol. 32(2), pages 311-334, June.
    6. repec:kap:asiapa:v:36:y:2019:i:1:d:10.1007_s10490-017-9559-3 is not listed on IDEAS

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