Emerging Markets for GM Foods: An Indian Perspective on Consumer Understanding and Willingness to Pay

Satish Y. Deodhar, Ganesh Sankar and Chern Wen S

No WP2007-06-08, IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department

Abstract: This paper addresses the issues of consumer awareness, opinion, acceptance and willingness to pay for GM foods in the Indian market. A random utility approach is used to estimate a logit equation which indicates what factors affect the likelihood of consumption of non-GM and GM foods and whether or not consumers are willing to pay a premium for non-GM/GM foods. Data was generated through questionnaire survey which was administered to 602 respondents in the city of Ahmedabad and 110 respondents on internet. More than 90% of the respondents from the city survey did not know about GM foods. However, after informing them about the pros and cons of GM foods, more than 70% were willing to consume even if GM and non-GM foods were available for the same price. Ceteris paribus as the price difference between non-GM and GM food rose, people were more likely to consume GM foods. Likelihood of GM food consumption seemed to increase as one moved from very poor and not-so-poor income brackets to higher income brackets. Being a female or a joint family member increased the likelihood of choosing non-GM rice and edible oil. On an average, consumers were willing to pay 19.5% and 16.12% premiums for golden rice and GM edible oil, respectively. Overall, it appears that GM foods will be acceptable in the Indian market. However, consumer education societies, government ministries, and food companies may have to create awareness about the GM foods among Indian consumers.

Date: 2007-06-08
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