Consumer Benefits of Labels and Bans on GMO Foods: An Emprical Analysis Using Choice Experiments

Fredrik Carlsson, Peter Frykblom and Carl-Johan Lagerkvist

No 04-02, Working Papers from Department of Economics, Appalachian State University

Abstract: Applying a choice experiment on the choice of consumer goods we show that Swedish consumers do not regard GMO food as being equivalent to conventional food. A central argument by proponents of GMO is that the end products are identical to those where GMO has not been used. That respondents in our survey disagree with this argument is supported by two observations. First, a positive significant WTP is found for a mandatory labeling policy. This result confirms previous observations that GMO food can be a credence good causing a market failure. Second, consumers are also willing to pay a significantly higher product price to ensure a total ban on the use of GMO in animal fodder. Even if scientists and politicians argue that most of today’s GMO food is indistinguishable from GMO free food, the consumers disagree.

Date: 2004
New Economics Papers: this item is included in nep-dcm, nep-exp and nep-ino
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