The Effects of Information on Consumer Demand for Biotech Foods: Evidence from Experimental Auctions

Abebayehu Tegene, Wallace Huffman, Matthew Rousu and Jason Shogren

ISU General Staff Papers from Iowa State University, Department of Economics

Abstract: Consumers’ desires to make informed decisions about their food purchases have made the biotech food labeling issue an important public policy debate. The debate revolves around the benefits and risks of agricultural biotechnology. Agribusiness companies like Monsanto support agricultural biotechnology and say that biotech foods will help protect the environment, increase nutrition, and end world hunger (Council for Biotechnology Information, 2001). Environmental groups like Greenpeace oppose agricultural biotechnology and say that biotech foods cause allergic reaction, hurt the environment, and increase the power of multinational companies (Greenpeace, 2001). Consumer advocates and a wide range of environmental and food safety groups have mounted an active campaign against biotech foods. The average consumer (and farmer) may rely on the information from these interested parties, both pro and con, to make their decisions on biotech products. Huffman and Tegene (2002) have hypothesized that independent, third-party information improves social welfare in this environment. According to qualitative and quantitative research conducted in the United States by the International Food Information Council (IFIC), consumers accept food biotechnology when the benefits are effectively communicated (Schmidt, 2002).

Date: 2003-03-01
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Working Paper: THE EFFECTS OF INFORMATION ON CONSUMER DEMAND FOR BIOTECH FOODS: EVIDENCE FROM EXPERIMENTAL AUCTIONS (2003)
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