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Consumers' Resistance to Genetically Modified Foods: The Role of Information in an Uncertain Environment

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  • Huffman, Wallace E.
  • Rousu, M.C.
  • Shogren, Jason F.
  • Tegene, Abebayehu

Abstract

Genetically modified (GM) foods have been engulfed in considerable controversy, and the early optimism has been dampened. Information issues--labeling and asymmetric information--are central to the GM-food debate. Furthermore, it is important to understand the reaction in developed countries to GM-foods because they set the tone of the world market in grains, oilseeds, and animal products. New results are reported from a statistical analysis of the market characteristics that push consumers in a high-income country to resist GM foods, with an emphasis on negative information from environmental groups and third-party, verifiable information, which could neutralize private information distributed by interested parties. A unique sample of adult consumers participated in laboratory auctions of three food products with randomized labeling and information treatments. A key finding is that GM information supplied by environmental groups increases the probability that consumers are out of the market for GM-foods. Third-party verifiable information, however, dissipates most of the negative effect of the environmental group perspective. Selective adoption of GM crops seems likely to raise world welfare but Western Europe's banning of GM imports and technology will largely affect them negatively.

Suggested Citation

  • Huffman, Wallace E. & Rousu, M.C. & Shogren, Jason F. & Tegene, Abebayehu, 2004. "Consumers' Resistance to Genetically Modified Foods: The Role of Information in an Uncertain Environment," Staff General Research Papers Archive 12339, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:12339
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    References listed on IDEAS

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    1. 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.
    2. 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," ISU General Staff Papers 200201010800001245, Iowa State University, Department of Economics.
    3. Jerry A. Hausman, 1996. "Valuation of New Goods under Perfect and Imperfect Competition," NBER Chapters, in: The Economics of New Goods, pages 207-248, National Bureau of Economic Research, Inc.
    4. Johnston, Robert J. & Roheim, Cathy A. & Donath, Holger & Asche, Frank, 2001. "Measuring Consumer Preferences For Ecolabeled Seafood: An International Comparison," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(1), pages 1-20, July.
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    Cited by:

    1. Dmitriy Volinskiy & Wiktor L. Adamowicz & Michele Veeman & Lorie Srivastava, 2009. "Does Choice Context Affect the Results from Incentive‐Compatible Experiments? The Case of Non‐GM and Country‐of‐Origin Premia in Canola Oil," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(2), pages 205-221, June.
    2. Sara Scatasta & Justus Wesseler & Jill Hobbs, 2007. "Differentiating the consumer benefits from labeling of GM food products," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2‐3), pages 237-242, September.
    3. Bansal, Sangeeta & Chakravarty, Sujoy & Ramaswami, Bharat, 2013. "The informational and signaling impacts of labels: experimental evidence from India on GM foods," Environment and Development Economics, Cambridge University Press, vol. 18(6), pages 701-722, December.
    4. Onyango, Benjamin M. & Nayga, Rodolfo M., Jr. & Govindasamy, Ramu, 2005. "U.S. Consumers' Willingness to Pay for Labeling Information on Genetically Modified Foods: An Application of Choice Modeling," 2005 Annual meeting, July 24-27, Providence, RI 19490, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Liu, Pengcheng & Huang, Chung-Huang & Feng, Zhongchao & Zhou, Deyi, 2009. "Consumer’s choice on GM labeling: evidences from China," 2009 Conference, August 16-22, 2009, Beijing, China 51807, International Association of Agricultural Economists.
    6. Dhar, Tirtha Pratim & Foltz, Jeremy D., 2003. "Market Structure And Consumer Valuation In The Rbst-Free And Organic Milk Markets," 2003 Annual meeting, July 27-30, Montreal, Canada 22177, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Dhar, Tirtha Pratim & Foltz, Jeremy D., 2004. "Is Soy Milk? The Economics Of The Soy Milk Market," 2004 Annual meeting, August 1-4, Denver, CO 20337, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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