Should The United States Initiate A Mandatory Labeling Policy For Genetically Modified Foods?
In many countries, including those in the European Union, Japan, Australia, and China, labeling is required for foods that contain genetically modified material. Other countries, including the United States, do not require mandatory labeling of GM foods. The United States, however, does allow firms to voluntarily label their products as non-GM. This raises the question of whether a mandatory labeling or voluntary labeling policy is more efficient. Proponents of voluntary labeling policies say they are less expensive, because only the firms that wish to label their products must incur the labeling costs. In a mandatory labeling regime, all firms would need to incur additional costs, whether the costs are due to product testing, label design, segregation, mistakes in labeling, etc. Many proponents of mandatory labeling of GM foods say that consumers have a "right to know" what they are eating and proponents claim that governments should mandate labels for foods made through genetic modification. This paper presents empirical evidence on consumers' value for foods with positive (i.e. this food is made with genetic engineering) labels versus and for foods with negative (i.e. this food is made without genetic engineering) labels. The positive label is likely to occur under a mandatory labeling system, while the negative label is likely to occur in a voluntary system. Thus, we present evidence on the consumer value of different labeling policies. We estimate values using a laboratory auction experiment performed on 142 randomly chosen adult consumers in the Des Moines, IA, and Saint Paul, MN, areas, grouped in 8 experimental units. They participated in a random nth-price auction experiment, in which they bid on three familiar neutral food items (an oil, a processed food, and a fresh food) that may be genetically modified. Experimental units are randomly assigned to the labeling treatment (i.e., food items with accurate GM food labels versus no food labels). Using statistical design and econometric analysis, this paper will estimate the average value of food label regimes to consumers. This will be measured as the difference in the auction price of a particular food item with and without a GM food label. We present evidence that shows that a voluntary labeling system elicits the same consumer reaction as a mandatory labeling system. Because a voluntary labeling policy would be less expensive to implement, this paper provides evidence that the United States should not abandon the current voluntary labeling system for a mandatory one. This information could be useful to U.S. public policy makers who must decide on GM food labeling legislation.
|Date of creation:||2002|
|Date of revision:|
|Contact details of provider:|| Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202|
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Shogren, Jason F. & Shin, Seung Youll & Hayes, Dermot J. & Kliebenstein, James, 1994. "Resolving Differences in Willingness to Pay and Willingness to Accept," Staff General Research Papers Archive 701, Iowa State University, Department of Economics.
- George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
- 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.
- Jayson L. Lusk & Jutta Roosen & John A. Fox, 2003.
"Demand for Beef from Cattle Administered Growth Hormones or Fed Genetically Modified Corn: A Comparison of Consumers in France, Germany, the United Kingdom, and the United States,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 85(1), pages 16-29.
- Lusk, Jayson L. & Roosen, Jutta & Fox, John A., 2001. "Demand For Beef From Cattle Administered Growth Hormones Or Fed Genetically Modified Corn: A Comparison Of Consumers In France, Germany, The United Kingdom, And The United States," 2001 Annual meeting, August 5-8, Chicago, IL 20684, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Noussair, C. & Robin, S. & Ruffieux, B., 2001.
"Do Consumers Not Care about Biotech Foods or Do They Just Not Read the Labels?,"
Purdue University Economics Working Papers
1142, Purdue University, Department of Economics.
- Noussair, Charles & Robin, Stephane & Ruffieux, Bernard, 2002. "Do consumers not care about biotech foods or do they just not read the labels?," Economics Letters, Elsevier, vol. 75(1), pages 47-53, March.
- Cannon Koo & John List & Michael Margolis & Jason Shogren, 2001.
"A random nth-price auction,"
Artefactual Field Experiments
00517, The Field Experiments Website.
- 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).
- Fox, John A. & Shogren, J. & Hayes, Dermot J. & Kliebenstein, James, 2003.
"Cvm-X: Calibrating Contingent Values with Experimental Auction Markets,"
Staff General Research Papers Archive
11935, Iowa State University, Department of Economics.
- John A. Fox & Jason F. Shogren & Dermot J. Hayes & James B. Kliebenstein, 1998. "CVM-X: Calibrating Contingent Values with Experimental Auction Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 455-465.
- Fox, John A. & Shogren, Jason F. & Hayes, Dermot J. & Kliebenstein, James, 1998. "Cvm-X: Calibrating Contingent Values with Experimental Auction Markets," Staff General Research Papers Archive 1311, Iowa State University, Department of Economics.
- 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.
- Golan, Elise H. & Kuchler, Fred & Mitchell, Lorraine, 2000. "Economics Of Food Labeling," Agricultural Economics Reports 34069, United States Department of Agriculture, Economic Research Service.
When requesting a correction, please mention this item's handle: RePEc:ags:aaea02:19857. 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)
If references are entirely missing, you can add them using this form.