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An Experimental Investigation of Willingness to Pay for Non-GM and Organic Food Products

Author

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  • Gifford, Katie
  • Bernard, John C.
  • Toensmeyer, Ulrich C.
  • Bacon, J. Richard

Abstract

The appearance and rapid adoption of genetically modified (GM) foods and the strong growth in organic foods are two of the major trends that have influenced the food system over the past several years. The purpose of this research was to determine consumer willingness to pay (WTP) for non-GM and organic foods relative to conventional foods and to see if WTP differences between the three categories vary between fresh and processed food products. Experimental auctions with 133 subjects from three states (Delaware, Maryland, and Pennsylvania) were conducted. Tobit models were run with the bids as functions of demographic and knowledge and attitude variables. Results suggest an untapped market exists for non-GM products at a substantial premium over conventional, yet less than organic. This segment may be difficult to identify though as attitude variables were more important explainers of bids than demographics.

Suggested Citation

  • Gifford, Katie & Bernard, John C. & Toensmeyer, Ulrich C. & Bacon, J. Richard, 2005. "An Experimental Investigation of Willingness to Pay for Non-GM and Organic Food Products," 2005 Annual meeting, July 24-27, Providence, RI 19385, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea05:19385
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    File URL: http://purl.umn.edu/19385
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    References listed on IDEAS

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    1. Huffman, Wallace E. & Shogren, Jason F. & Rousu, Matthew C. & Tegene, Abebayehu, 2003. "Consumer Willingness to Pay for Genetically Modified Food Labels in a Market with Diverse Information: Evidence from Experimental Auctions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(03), December.
    2. Golan, Elise H. & Kuchler, Fred & Mitchell, Lorraine, 2000. "Economics Of Food Labeling," Agricultural Economics Reports 34069, United States Department of Agriculture, Economic Research Service.
    3. Govindasamy, Ramu & Italia, John, 1999. "Predicting Willingness-To-Pay A Premium For Organically Grown Fresh Produce," Journal of Food Distribution Research, Food Distribution Research Society, vol. 30(2), July.
    4. Wallace E. Huffman, 2003. "Consumers' Acceptance of (and Resistance to) Genetically Modified Foods in High-Income Countries: Effects of Labels and Information in an Uncertain Environment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1112-1118.
    5. Loureiro, Maria L. & Hine, Susan, 2002. "Discovering Niche Markets: A Comparison of Consumer Willingness to Pay for Local (Colorado Grown), Organic, and GMO-Free Products," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 34(03), pages 477-487, December.
    6. Lusk, Jayson L. & Daniel, M. Scott & Mark, Darrell R. & Lusk, Christine L., 2001. "Alternative Calibration And Auction Institutions For Predicting Consumer Willingess To Pay For Nongenetically Modified Corn Chips," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(01), July.
    7. Dimitri, Carolyn & Greene, Catherine R., 2002. "Recent Growth Patterns In The U.S. Organic Foods Market," Agricultural Information Bulletins 33715, United States Department of Agriculture, Economic Research Service.
    8. Frode Alfnes & Kyrre Rickertsen, 2003. "European Consumers' Willingness to Pay for U.S. Beef in Experimental Auction Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 396-405.
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    Cited by:

    1. Costa-Font, Montserrat & Gil, José M. & Traill, W. Bruce, 2008. "Consumer acceptance, valuation of and attitudes towards genetically modified food: Review and implications for food policy," Food Policy, Elsevier, vol. 33(2), pages 99-111, April.

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    Keywords

    Consumer/Household Economics;

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