GMO and Non-GMO Labeling Effects: Evidence from a Quasi-Natural Experiment

Aaron Adalja (), Jūra Liaukonytė (), Emily Wang () and Xinrong Zhu
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Aaron Adalja: S.C. Johnson College of Business, Cornell University, Ithaca, New York 14853
Jūra Liaukonytė: S.C. Johnson College of Business, Cornell University, Ithaca, New York 14853
Emily Wang: Department of Resource Economics, University of Massachusetts, Amherst, Massachusetts 01003

Marketing Science, 2023, vol. 42, issue 2, 233-250

Abstract: The United States recently mandated disclosure labels on all foods that contain genetically modified organisms (GMOs), despite longstanding, widespread use of voluntary third-party non-GMO labeling. We leverage the earlier passage and implementation of a mandatory GMO labeling law in Vermont as a quasi-natural experiment to show that adding this mandatory labeling into a market with pre-existing voluntary non-GMO labels had no effect on demand. Instead, the legislative process made consumers aware of GMO topics and increased non-GMO product sales before the GMO labeling mandate went into effect. The GMO-related legislative processes also increased non-GMO product demand in other states that considered, but did not implement, GMO labeling mandates. We find that 36% of new non-GMO product adoption can be explained by differences in consumer awareness tied to legislative activity. Our findings suggest that voluntary non-GMO labels may have provided an efficient disclosure mechanism without mandatory GMO labels.

Keywords: GMO labeling; difference-in-differences; synthetic control; policy evaluation (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:42:y:2023:i:2:p:233-250

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