Information on genetically modified foods and how it affects consumers: evidence from experimental auctions

Genetically modified (GM) foods have been at the center of a contentious debate. One side of the debate includes environmental groups like Greenpeace and Friends of the Earth, who are opposed to GM foods---these groups would like GM foods banned, or at the very least they want GM foods to be clearly labeled as such. On the other side of the debate are agribusiness companies like Monsanto and Syngenta, who view GM foods positively. They think GM foods help the environment and could help feed the malnourished. Both groups actively disseminate information on genetically modified foods.;This dissertation reports on several results from experimental auctions where consumers actually had to purchase food products if they won the auctions. Consumers were able to accurately read the signals for which food was GM in experimental markets that emulated mandatory and voluntary GM-labeling regimes. This shows evidence that the U.S. has been prudent in not implementing a mandatory labeling policy for GM foods. Consumers place a large value on keeping non-GM foods free from any GM-material (not allowing a small "tolerance" for GM-material). Consumers did not place extra value, however, on a 1% tolerant food relative to a 5% tolerant food. This provides evidence that if the United States chooses a tolerance policy for GM-material, a 5% GM-tolerance may be better than a 1% tolerance.;Currently the information available to consumers on GM foods is from interested parties. Chapter 4 shows that a third party source that provides verifiable information on GM foods could have a large annual value to U.S. consumers. This value is due to helping consumers make more informed choices. Verifiable information can also have value by preventing the non-adoption of socially useful inventions.;This dissertation also shows that a majority of consumers would either trust the government, or an independent third party source for information on GM foods---so if a body is created to disseminate this information, a quasi-governmental organization may be the most trusted. This dissertation provides a look at many aspects of how information on genetically modified foods affects consumer behavior.