Consumer Benefits of Labels and Bans on GM Foods—Choice Experiments with Swedish Consumers

Abstract

The European Union has been relatively cautious about using biotechnology in food production. A label regime combined with the right of individual member states to ban introduction of new genetically modified (GM) strains means that GM food products in effect are banned in many countries. We show how it is possible to empirically test whether a ban can be motivated by reference to potential negative externalities. This is followed up by results from a choice experiment. We cannot reject the hypothesis of equal WTP for a ban and a labeling scheme.

Conformity and the Demand for Environmental Goods

“…It is a well-established fact that many people are concerned with the environment when making consumption decisions (Carlsson et al, 2007;Teisl et al, 2002;Bjorner et al, 2004), although the degree of concern differs among individuals, goods, and environmental problems. There are many reasons why people have environmentally friendly preferences, ranging from purely self-interest motives such as health risk avoidance to ethical and altruistic concerns about biodiversity, climate, or animal welfare.…”

Do Political Attitudes Affect Consumer Choice? Evidence from a Large-Scale Field Study with Genetically Modified Bread in Switzerland

“…This allowed us to test the frequently heard claims that the mere presence of GM food would put off consumers [28,31], arguing that this would express their social values about the production of food in their purchasing decisions [24].…”

“…In this study, we want to investigate to what extent the mere presence of labeled GM food represents a negative externality for consumers, as claimed by previous research [28,31]. This can be tested by giving individuals the opportunity to reveal their preference on genetic engineering in agriculture at the polls and the market stand alike.…”

“…Some scholars found a willingness among European consumers to pay a premium price for a ban on labeled GM food products in supermarkets [28]. This would indicate that the mere presence of GM products in the supermarket would put people off and thus represent a negative externality for consumers.…”

“…We did so by starting with a control sale in which only conventional and organic corn bread was on offer. This allowed us to test whether the mere presence of GM food would put off consumers and represent a negative externality [28]. This is an argument often used by retailers to justify their decision not to offer approved GM food.…”