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The Effects Of Information On Consumer Demand For Biotech Foods: Evidence From Experimental Auctions

Author

Listed:
  • Tegene, Abebayehu
  • Huffman, Wallace E.
  • Rousu, Matthew C.
  • Shogren, Jason F.

Abstract

Consumers' willingness to pay for food products decreases when the food label indicates that a food product is produced with the aid of modern biotechnology. This bulletin presents empirical evidence on consumers' willingness to pay for biotech foods based on the presence or absence of labels advising that the food was prepared with the aid of biotechnology. The authors designed and conducted an experimental auction to elicit consumers' willingness to pay for "genetically modified" (GM)-labeled and standard-labeled foods under different information regimes. The evidence gathered for vegetable oil, tortilla chips, and potatoes shows that labels matter. In particular, under all information treatments, consumers discounted food items labeled "GM" by an average of 14 percent. While gender, income, and other demographic characteristics appeared to have only a slight impact on consumers' willingness to pay for biotech foods, information from interested parties and third-party (independent) sources was found to have a strong impact.

Suggested Citation

  • Tegene, Abebayehu & Huffman, Wallace E. & Rousu, Matthew C. & Shogren, Jason F., 2003. "The Effects Of Information On Consumer Demand For Biotech Foods: Evidence From Experimental Auctions," Technical Bulletins 33577, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uerstb:33577
    DOI: 10.22004/ag.econ.33577
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    File URL: http://ageconsearch.umn.edu/record/33577/files/tb031903.pdf
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    Cited by:

    1. Lee, Ji Yong & Han, Doo Bong & Nayga Jr, Rodolfo M. & Lim, Song-Soo, 2011. "Valuing traceability of imported beef in Korea: an experimental auction approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(3), pages 1-14, September.
    2. Jin, Jing & Wailes, Eric & Dixon, Bruce & Nayga, Rodolfo M. Jr. & Zheng, Zhihao, 2014. "Consumer Acceptance and Willingness to Pay for Genetically Modified Rice in China," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170503, Agricultural and Applied Economics Association.
    3. James, Jennifer S. & Fleischer, Shelby J. & Johnson, David H. & Schwab, Bradley D. & Lord, John, 2005. "Consumer Purchases of Biotech Sweet Corn: Results from a Market Experiment," 2005 Annual meeting, July 24-27, Providence, RI 19213, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Terawaki, Taku, 2005. "Effects of Information on Consumer Risk Perception and Willingness to Pay for Non-Genetically Modified Corn Oil," 2005 Annual meeting, July 24-27, Providence, RI 19555, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Hans D. Steur & Jeroen Buysse & Shuyi Feng & Xavier Gellynck, 2013. "Role of Information on Consumers’ Willingness-to-pay for Genetically-modified Rice with Health Benefits: An Application to China," Asian Economic Journal, East Asian Economic Association, vol. 27(4), pages 391-408, December.
    6. Xue, Hong & Mainville, Denise Y. & You, Wen & Nayga, Rodolfo M., Jr., 2009. "Nutrition Knowledge, Sensory Characteristics and Consumers’ Willingness to Pay for Pasture-Fed Beef," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49277, Agricultural and Applied Economics Association.
    7. Armenak Markosyan & Jill J. McCluskey & Thomas I. Wahl, 2009. "Consumer Response to Information about a Functional Food Product: Apples Enriched with Antioxidants," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(3), pages 325-341, September.

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