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

Benjamin Onyango, Rodolfo M. Nayga and Ramu Govindasamy
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Benjamin Onyango: Rutgers University
Rodolfo M. Nayga: Texas A&M University
Ramu Govindasamy: Rutgers University

Agricultural and Resource Economics Review, 2006, vol. 35, issue 2, pages 299-310

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 corn” have a value of 10 percent more, the label “USDA approved genetically modified corn” has a value of 5 percent more, and the label “corn genetically modified to reduce pesticide residues in your food” has a value of 5 percent more. The results also suggest that consumers nega-tively valued the label “contains genetically modified corn,” paying 6.5 percent less, and the label “may contain genetically modified corn,” paying 1 percent less than the product that has no label information.

Keywords: genetically modified foods; labeling genetically modified foods; random parame-ter logit model (search for similar items in EconPapers)

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