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Should the United States Regulate Mandatory Labeling for Genetically Modified Foods?

  • Huffman, Wallace
  • Rousu, Matthew
  • Shogren, Jason F.
  • Tegene, Abebayehu

Public debate continues over whether the United States should regulate genetically modified (GM) foods by imposing a mandatory labeling policy. This paper develops a model that shows that a voluntary GM-labeling policy results in higher welfare than a regulated mandatory GM-labeling policy, if consumers can accurately read the signals in each market. We then develop an experiment that shows consumers behave as if they can accurately identify signals for GM foods. Our model and results support the perspective that the United States has been prudent in fending off calls for regulations demanding a mandatory GM-labeling policy.

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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 10047.

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Date of creation: 30 Oct 2002
Date of revision:
Handle: RePEc:isu:genres:10047
Contact details of provider: Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
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  1. Golan, Elise H. & Kuchler, Fred & Mitchell, Lorraine, 2000. "Economics Of Food Labeling," Agricultural Economics Reports 34069, United States Department of Agriculture, Economic Research Service.
  2. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, 03.
  3. Fox, John A. & Shogren, J. & Hayes, Dermot J. & Kliebenstein, James, 2003. "Cvm-X: Calibrating Contingent Values with Experimental Auction Markets," Staff General Research Papers 11935, Iowa State University, Department of Economics.
  4. 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.
  5. James Mintert & Jayson Lusk & John Fox & Mohammad Koohmaraie & Ted Schroeder, 2001. "In-store valuation of steak tenderness," Framed Field Experiments 00186, The Field Experiments Website.
  6. Rousu, Matthew & Huffman, Wallace & Shogren, Jason F. & Tegene, Abebayehu, 2002. "The Value of Verifiable Information in a Controversial Market: Evidence from Lab Auctions of Genetically Modified Food," Staff General Research Papers 10009, Iowa State University, Department of Economics.
  7. Lusk, Jayson L. & Daniel, M. Scott & Mark, Darrell R. & Lusk, Christine L., 2000. "Alternative Calibration And Auction Institutions For Predicting Consumer Willingness-To-Pay For Non-Genetically Modified Corn Chips," 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia 36424, Western Agricultural Economics Association.
  8. John A. List & Jason F. Shogren, 1999. "Price Information and Bidding Behavior in Repeated Second-Price Auctions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 942-949.
  9. Jack Knetsch & Fang-Fang Tang & Richard Thaler, 2001. "The Endowment Effect and Repeated Market Trials: Is the Vickrey Auction Demand Revealing?," Experimental Economics, Springer, vol. 4(3), pages 257-269, December.
  10. Kinsey, Jean D. & Wolfson, Paul J. & Katsaras, Nikolaos & Senauer, Benjamin, 2001. "Data Mining: A Segmentation Analysis Of U.S. Grocery Shoppers," Working Papers 14335, University of Minnesota, The Food Industry Center.
  11. Carlson, Andrea & Kinsey, Jean D. & Nadav, Carmel, 1998. "Who Eats What, When, And From Where?," Working Papers 14312, University of Minnesota, The Food Industry Center.
  12. Jason F. Shogren & John A. Fox, 1996. "Consumer Preferences for Fresh Food Items with Multiple Quality Attributes: Evidence from an Experimental Auction of Pork Chops," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 916-923.
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  14. Smith, Vernon L, 1976. "Experimental Economics: Induced Value Theory," American Economic Review, American Economic Association, vol. 66(2), pages 274-79, May.
  15. 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).
  16. David Lucking-Reiley & John A. List, 2000. "Demand Reduction in Multiunit Auctions: Evidence from a Sportscard Field Experiment," American Economic Review, American Economic Association, vol. 90(4), pages 961-972, September.
  17. 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.
  18. Shogren, Jason F. & Margolis, Michael & Koo, Cannon & List, John A., 2001. "A random nth-price auction," Journal of Economic Behavior & Organization, Elsevier, vol. 46(4), pages 409-421, December.
  19. 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.
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