Are Us Consumers Tolerant Of Gm Foods?
Many countries require labeling for GM food products. These countries often have different levels of genetic modification that they will tolerate before a food product must be labeled as genetically modified. For example, the European Union and Australia allow up to one percent of any ingredient in a food product to be GM before the product must be labeled as genetically modified. Japan allows 5% of any ingredient to be genetically modified before the product must be labeled as such. The United States currently does not require mandatory labeling of GM labeled foods and has no standards for what percentage of an ingredient in a food product can be genetically modified for the product to still be labeled non-GM. For the official "organic" certification by the United States, a food product must be genetically modified and there is no tolerance for any genetically modified content. This paper presents empirical evidence on consumers' value for non-GM foods that are certified to have no GM content and non-GM foods that could have ingredients that were up to one or five percent genetically modified. We estimate values using a laboratory auction experiment performed on 44 randomly chosen adult consumers in the Des Moines, IA, area, grouped in 3 experimental units. They participated in a random nth-price auction experiment, in which they bid on three familiar neutral food items that may be genetically modified. Using statistical design and econometric analysis, this paper will estimate the average value of tolerance levels to consumers, measured as the difference in the auction price of a certified non-GM food and a non-GM food that had a tolerance of one or five percent. This paper has two findings. We find evidence indicating consumers place value in a certified non-GM food product, as opposed to a non-GM food product with a tolerance. We find no evidence, however, that consumers value a product with a tolerance of one percent more than they value a product with a tolerance of five percent. Due to decreased firm costs of complying with a tolerance of five percent, we find evidence that if the United States decides to enact a tolerance standard, a five percent tolerance may be better than a one percent tolerance. This information could be useful to policy makers who are considering whether to write in an acceptable tolerance level for genetically modified material.
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