Consumers' Willingness to Pay for New Genetically Modified Food Products: Evidence from Experimental Auctions of Intragenic and Transgenic Foods

New genetically modified (GM) foods were first marketed about a decade ago and have been surrounded by much controversy. Although the first GM traits were introduced into vegetables, GM grain and oilseed crops have been most successful because of their direct benefits to farmers. Recent advances in GM techniques enable new GM foods that contain enhanced consumer attributes. Private information from the biotech industry and from environmental groups paint extreme pictures of likely benefits, costs, and risks of new GM crops and foods. Given the complex nature of the GM food market, new experimental economic methods are used to assess consumers' willingness to pay for food products that might be made using new GM technologies. Participants in these auctions are randomly chosen adult consumer in major U.S. metropolitan areas; food labels are kept simple and focused on key attributes of experimental goods; and diverse private information from the agricultural biotech industry (e.g. Monsanto and Syngenta) and environmental groups (e.g. Greenpeace and Friends of the Earth) and independent third-party information are used to construct information treatments. Food labels and information treatments are randomized; and auctions are best described as private value, sealed bid, random n-th price. The econometric model of participants' bid prices, or willingness to pay, for three products---potato, tomato and broccoli---is a Bayesian random-effects seemingly-unrelated regression Tobit model. For a given food label, we find significant information treatment effects, controlling for demographic attributes of participants, prior opinions about GM foods, and healthiness of lifestyle. Moreover, these effects are shown to differ across food labels and for commodities with and without enhanced consumer attributes. Information is shown to have significant welfare effects.