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

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

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.

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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12339.

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Date of creation: 01 Jan 2004
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Publication status: Published in Journal of Agricultural & Food Industrial Organization 2004, vol. 2, Article 8, pp. 1-13
Handle: RePEc:isu:genres:12339
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
Web page: http://www.econ.iastate.edu
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