Hostname: page-component-78c5997874-s2hrs Total loading time: 0 Render date: 2024-11-04T19:32:37.896Z Has data issue: false hasContentIssue false
  • English
  • Français

U.S. Consumers' Willingness to Pay for Food Labeled ‘Genetically Modified’

Published online by Cambridge University Press:  15 September 2016

Benjamin Onyango ,
Rodolfo M. Nayga Jr.  and
Ramu Govindasamy
Benjamin Onyango
Affiliation:
Food Policy Institute at Rutgers University, New Brunswick, New Jersey
Rodolfo M. Nayga Jr.
Affiliation:
Department of Agricultural Economics at Texas A&M University, College Station, Texas
Ramu Govindasamy
Affiliation:
Department of Agricultural, Food, and Resource Economics at Rutgers University, New Brunswick, New Jersey
Get access

Abstract

This study analyzes U. S. consumers' choice of cornflakes under five different labeling statements. Using a nationwide survey and choice modeling framework, results indicate that consumers value labeling statements differently, depending on the information contained on the label. The random parameter logit model results indicated that, compared to cornflakes that have no label information, cornflakes labeled “contains no genetically modified com” have a value of 10 percent more, the label “USDA approved genetically modified com” has a value of 5 percent more, and the label “com genetically modified to reduce pesticide residues in your food” has a value of 5 percent more. The results also suggest that consumers negatively valued the label “contains genetically modified com,” paying 6.5 percent less, and the label “may contain genetically modified com,” paying 1 percent less than the product that has no label information.

Keywords

genetically modified foodslabeling genetically modified foodsrandom parameter logit model
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 35 , Issue 2 , October 2006 , pp. 299 - 310
Copyright
Copyright © 2006 Northeastern Agricultural and Resource Economics Association 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Bonnet, C., and Simioni, M. 2001. “Assessing Consumer Response to Protected Designation of Origin Labeling: A Mixed Multinomial Logit Approach.” European Review of Agricultural Economics 28(4): 433–449.Google Scholar
Brownstone, D., and Train, K. 1999. “Forecasting New Product Penetration With Flexible Substitution Patterns.” Journal of Econometrics 89(1/2): 109–129.Google Scholar
Carlsson, F., Frykblom, P., and Lagerkvist, C.J. 2004. “Consumer Benefits of Labels and Bans on Genetically Modified Food: An Empirical Analysis Using Choice Experiments.” Selected paper prepared for presentation at the American Agricultural Economics Association's annual meetings, Denver, Colorado (August 1–4).Google Scholar
Carter, C.A., and Gruère, G. P. 2003. “Mandatory Labeling of Genetically Modified Foods: Does It Really Provide Consumer Choice?” AgBioForum 6(1/2): 68–70.Google Scholar
Caswell, J.A. 1998. “Should Use of Genetically Modified Organisms Be Labeled?” AgBioForum 1(1): 22–24.Google Scholar
Caswell, J.A. 2000. “Labeling Policy for GMOs: To Each His Own?” AgBioForum 3(1): 53–57.Google Scholar
Fulton, M., and Giannakas, K. 2004. “Inserting GM Products Into the Food Chain: The Market and Welfare Effects of Different Labeling and Regulatory Regimes.” American Journal of Agricultural Economics 86(1): 42–60.Google Scholar
Golan, E., Kuchler, F., and Mitchell, L. 2000. “Economics of Food Labeling.” Agricultural Economic Report No. 793, Economic Research Service, U.S. Department of Agriculture, Washington, D. C.Google Scholar
Golder, G., and Leung, F. 2000. “Economic Impact Study: Potential Costs of Mandatory Labelling of Food Products Derived From Biotechnology in Canada.” KPMG Consulting, Ottawa. Available at weeds.montana.edu/news/KPM[-]GlabelCanada.pdf (accessed November 18, 2004).Google Scholar
Hallman, W. K., Aquino, H. L., and Phillips, D. M. 2003. “The GM Labeling Debate: Caveat Emptor: Caveat Venditor; Cui Bono?” Invited Paper presented at the conference “Crossing Over: Genomics in the Public Arena,” sponsored by the Genome Prairie Project, Kananaskis, Alberta, Canada (April 25).Google Scholar
Hallman, W. K., Hebden, W. C., Aquino, H. L., Cuite, C. L., and Lang, J. 2003. “Public Perceptions of Genetically Modified Foods: A National Study of Americans' Knowledge and Opinion.” Publication No. RR-1003-004, Food Policy Institute, Rutgers University, New Brunswick, NJ.Google Scholar
Hallman, W. K., Hebden, W. C., Aquino, H. L., Cuite, C. L., and Lang, J. 2004. “Americans and GM Food: Knowledge, Opinion and Interest in 2004.” Publication No. RR-1104-007, Food Policy Institute, Rutgers University, New Brunswick, NJ.Google Scholar
Hu, W., Veeman, M. M., and Adamowicz, W. L. 2005. “Labeling Genetically Modified Food: Heterogeneous Consumer Preferences and Value of Information.” Canadian Journal of Agricultural Economics 53(205): 82–102.Google Scholar
Huffman, W. E. 2003. “Consumers' Acceptance of (and Resistance to) Genetically Modified Foods in High-Income Countries: Effects of Labels and Information in an Uncertain Environment.” American Journal of Agricultural Economics 85(5): 112–118.Google Scholar
Huygen, I., Veeman, M., and Lerohl, M. 2003. “Cost Implications of Alternative GM Tolerance Levels: Non-Genetically Modified Wheat in Western Canada.” AgBioForum 6(4): 169–177.Google Scholar
James, C. 2003. “Preview: Global Status of Commercialized Transgenic Crops: 2003, Executive Summary.” Brief No. 30, International Service for the Acquisition of Agri-Biotech Applications (ISAAA). Available at www.isaaa.org/bin/Briefs/30/index.htm (accessed November 18, 2004).Google Scholar
Lancaster, K.J. 1966a. “A New Approach to Consumer Theory.” Journal of Political Economy 74(2): 132–157.Google Scholar
Lancaster, K.J. 1966b. “Change and Innovation in the Technology of Consumption.” American Economic Review 56(1/2): 14–23.Google Scholar
Li, Q., McCluskey, J.J., and Wahl, T. L. 2004. “Effects of Information on Consumers' Willingness to Pay for GM-Corn-Fed Beef.” Journal of Agricultural and Food Industrial Organization 2(2): 1–16. Available online at www.bepress.com/jafio/vol2/iss2/art9 (Article 9).Google Scholar
Louviere, J., Hensher, D., and Swait, J. 2000. Stated Choice Methods: Analysis and Application. Cambridge, U. K.: Cambridge University Press.CrossRefGoogle Scholar
McCluskey, J. J., and Loureiro, M. L. 2003. “Consumer Preferences and Willingness to Pay for Food Labeling: A Discussion of Empirical Studies.” Journal of Food Distribution Research 34(1): 95–102.Google Scholar
McFadden, D. 1973. “Conditional Logit Analysis of Qualitative Choice Behavior.” In Zarembka, P., ed., Frontiers in Econometrics. New York: Academic Press.Google Scholar
McFadden, D. 1978. “Modeling the Choice of Residential Location.” In Karlqvist, A., Lundqvist, L., Snickars, F., and Weibull, J., eds., Spatial Interaction Theory and Planning Models. Amsterdam: North Holland.Google Scholar
Muth, M. K., Mancini, D., and Viator, C. 2003. “U. S. Food Manufacturer Assessment of and Responses to Bioengineered Foods.” AgBioForum 5(3): 90–100.Google Scholar
Onyango, B., Govindasamy, R., and Nayga, R. M. Jr. 2004. “An Application Choice Modeling to Measure U. S. Consumer Preferences for Genetically Modified Foods.” Selected paper prepared for presentation at the American Agricultural Economics Association's annual meetings, Denver, Colorado (August 1–4).Google Scholar
Pew Initiative on Food and Biotechnology. 2004. “Genetically Modified Crops in the United States.” Available at http://pewagbiotech.org/resources/factsheets (accessed July 1, 2004).Google Scholar
Phillips, P.W.B., and McNeill, H. 2000. “Labeling For GM Foods: Theory and Practice.” AgBioForum 3(4): 219–224.Google Scholar
Revelt, D., and Train, K. 1998. “Mixed Logit with Repeated Choices.” Review of Economics and Statistics 80(4): 647–657.Google Scholar
Roosen, J., Lusk, J. L., and Fox, J.A. 2001. “Consumer Demand for and Attitudes Toward Beef Labeling Strategies in France, Germany and U. K.” Selected paper, American Agricultural Economics Association's annual meetings, Chicago, IL (August 5–8).Google Scholar
Rousu, M., and Huffman, W. E. 2001. “GM Food Labeling Policies of the U. S. and Its Trading Partners.” Department of Economics Staff Paper No. 344, Iowa State University, Ames, IA.Google Scholar
Rousu, M. C., Huffman, W. E., Shogren, J. F., and Tegene, A. “Estimating the Public Value of Conflicting Information: The Case of Genetically Modified Foods.” Land Economics 80: 125–135.Google Scholar
Runge, C. F., and Jackson, L. A. 2000. “Negative Labeling of Genetically Modified Organisms (GMOs): The Experience of rBST.” AgBioForum 3(1): 58–62.Google Scholar
Senhui, H. E., Fletcher, S., and Rimal, A. 2003. “Consumer Evaluation of the Desirability of Four Types of Information on Labels.” Journal of Food Distribution Research 34(1): 69–71.Google Scholar
Teisl, M. F., Gamer, L., Roe, B., and Vayda, M. E. 2003. “Labeling Genetically Modified Foods: How Do U. S. Consumers Want to See It Done?” AgBioForum 6(1/2): 48–54.Google Scholar
Train, K. 2002. Discrete Choice Methods with Simulation. Cambridge, U. K.: Cambridge University Press.Google Scholar