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An Experimental Investigation of Consumer Willingness to Pay for Non-GM Foods When an Organic Option Is Present

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  • Bernard, John C.
  • Zhang, Chao
  • Gifford, Katie

Abstract

This research compared bids that consumers placed on non genetically modified (GM), organic, and conventional versions of food products in order to determine if the organic market well serves those seeking to avoid GM foods. Auction experiments using potato chips, tortilla chips, and milk chocolate were conducted with 79 subjects. Bids were modeled as a function of consumer demographics using a heteroskedastic tobit regression model. Results with the non-GM attribute nested into the organic characteristic showed that the latter's marginal effects were insignificant. This suggested the potential to further develop non-GM products for consumers not willing to pay extra for the remaining organic attributes.

Suggested Citation

  • Bernard, John C. & Zhang, Chao & Gifford, Katie, 2006. "An Experimental Investigation of Consumer Willingness to Pay for Non-GM Foods When an Organic Option Is Present," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 35(2), pages 1-12, October.
    • Handle: RePEc:ags:arerjl:10226
    DOI: 10.22004/ag.econ.10226
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    1. McFadden, Brandon R. & Malone, Trey, 2018. "How will mandatory labeling of genetically modified food nudge consumer decision-making?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 77(C), pages 186-194.
    2. Bansal, Sangeeta & Chakravarty, Sujoy & Ramaswami, Bharat, 2013. "The informational and signaling impacts of labels: experimental evidence from India on GM foods," Environment and Development Economics, Cambridge University Press, vol. 18(6), pages 701-722, December.
    3. Lai, Yufeng & Yue, Chengyan, 2020. "Consumer Willingness to pay for Organic and Animal Welfare Product Attributes: Do Experimental Results Align with Market Data?," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304328, Agricultural and Applied Economics Association.
    4. Danielle Ufer & David L. Ortega & Christopher A. Wolf, 2022. "Information and consumer demand for milk attributes: Are redundant labels an effective marketing strategy?," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(2), pages 960-981, June.
    5. Kayode Ajewole & Elliott Dennis & Ted C. Schroeder & Jason Bergtold, 2021. "Relative valuation of food and non‐food risks with a comparison to actuarial values: A best–worst approach," Agricultural Economics, International Association of Agricultural Economists, vol. 52(6), pages 927-943, November.
    6. D Adeline Yeh & Miguel I Gómez & Harry M Kaiser, 2019. "Signaling impacts of GMO labeling on fruit and vegetable demand," PLOS ONE, Public Library of Science, vol. 14(10), pages 1-16, October.
    7. Pesek, John D., Jr. & Bernard, John C. & Gupta, Meeta, 2011. "Consumer Interest in Environmentally Beneficial Chicken Feeds: Comparing High Available Phosphorus Corn and Other Varieties," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 43(4), pages 1-15, August.
    8. Dmitriy Volinskiy & Wiktor L. Adamowicz & Michele Veeman & Lorie Srivastava, 2009. "Does Choice Context Affect the Results from Incentive‐Compatible Experiments? The Case of Non‐GM and Country‐of‐Origin Premia in Canola Oil," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(2), pages 205-221, June.
    9. Jessica Bosseaux & Philippe Aurier & Alain François-Heude, 2019. "The Effects of Organic Label on Marketing Performance (Prices, Sales, and Margins) [Les Effets du Label Bio sur la Performance Marketing (Prix, ventes et marges)]," Post-Print hal-03079843, HAL.
    10. Carola Grebitus & Anne O. Peschel & Renée Shaw Hughner, 2018. "Voluntary food labeling: The additive effect of “free from” labels and region of origin," Agribusiness, John Wiley & Sons, Ltd., vol. 34(4), pages 714-727, October.
    11. Margherita Del Prete & Antonella Samoggia, 2020. "Chocolate Consumption and Purchasing Behaviour Review: Research Issues and Insights for Future Research," Sustainability, MDPI, vol. 12(14), pages 1-18, July.
    12. Tatiana Drugova & Kynda R. Curtis & Sherzod B. Akhundjanov, 2020. "Are multiple labels on food products beneficial or simply ignored?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 68(4), pages 411-427, December.
    13. McFadden, Jonathan R. & Huffman, Wallace E., 2017. "Willingness-to-pay for natural, organic, and conventional foods: The effects of information and meaningful labels," Food Policy, Elsevier, vol. 68(C), pages 214-232.
    14. Nathalie de Marcellis-Warin & Ingrid Peignier & Yoann Guntzburger, 2018. "The Value of Food Certification and Labels for Consumers in Québec (Canada)," CIRANO Project Reports 2018rp-11, CIRANO.
    15. He, Na & Bernard, John C., 2011. "Differences in WTP and Consumer Demand for Organic and Non-GM Fresh and Processed Foods," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 40(2), pages 1-15, August.
    16. Brandon R. McFadden & Brittany N. Anderton & Kelly A. Davidson & John C. Bernard, 2021. "The effect of scientific information and narrative on preferences for possible gene‐edited solutions for citrus greening," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(4), pages 1595-1620, December.
    17. Sara de Sio & Giulia Casu & Alessandra Zamagni & Paola Gremigni, 2024. "Product Characteristics and Emotions to Bridge the Intention-Behavior Gap in Green Food Purchasing," Sustainability, MDPI, vol. 16(17), pages 1-20, August.
    18. Deng, Xueting & Saghaian, Sayed H. & Woods, Timothy A., 2012. "A Comparison of Consumer Willingness to Pay for Four Types of Sweeteners," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119811, Southern Agricultural Economics Association.
    19. Eva Tebbe & Korbinian von Blanckenburg, 2018. "Does willingness to pay increase with the number and strictness of sustainability labels?," Agricultural Economics, International Association of Agricultural Economists, vol. 49(1), pages 41-53, January.

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