IDEAS home Printed from https://ideas.repec.org/p/fpr/eptddp/69.html
   My bibliography  Save this paper

Consumption effects of genetic modification: what if consumers are right?

Author

Listed:
  • Giannakas, Konstantinos
  • Fulton, Murray

Abstract

This paper develops a model of differentiated consumers to examine the consumption effects of genetic modification (GM) under alternative labeling regimes and segregation enforcement scenarios. Analytical results show that if consumers perceive GM products as being different than their traditional counterparts, genetic modification affects consumer welfare and, thus, consumption decisions. When the existence of market imperfections in one or more stages of the supply chain prevents the transmission of cost savings associated with the new technology to consumers, genetic modification results in welfare losses for consumers. The analysis shows that the relative welfare ranking of the “no labeling” and “mandatory labeling” regimes depends on: (i) the level of consumer aversion to genetic modification, (ii) the size of marketing and segregation costs under mandatory labeling; (iii) the share of the GM product to total production; and (iv) the extent to which GM products are incorrectly labeled as non-GM products.

Suggested Citation

  • Giannakas, Konstantinos & Fulton, Murray, 2000. "Consumption effects of genetic modification: what if consumers are right?," EPTD discussion papers 69, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:eptddp:69
    as

    Download full text from publisher

    File URL: http://www.ifpri.org/sites/default/files/publications/eptdp69.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lindner, Bob, 2000. "The Future for Frankenstein Foods," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 171917, Australian Agricultural and Resource Economics Society.
    2. Julie A. Caswell & Eliza M. Mojduszka, 1996. "Using Informational Labeling to Influence the Market for Quality in Food Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(5), pages 1248-1253.
    3. Pender, John L. & Scherr, Sara J., 1999. "Organizational development and natural resource management: evidence from central Honduras," EPTD discussion papers 49, International Food Policy Research Institute (IFPRI).
    4. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
    5. Alston, Julian M. & Pardey, Philip G. & Smith, Vincent H., 1998. "Financing agricultural R&D in rich countries: what's happening and why," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 42(1), pages 1-32.
    6. Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-754, July/Aug..
    7. Jill E. Hobbs & Marni D. Plunkett, 1999. "Genetically Modified Foods: Consumer Issues and the Role of Information Asymmetry," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 47(4), pages 445-455, December.
    8. Plunkett, Marni D. & Gaisford, James D., 2000. "Limiting Biotechnology? Information Problems and Policy Responses," CAFRI: Current Agriculture, Food and Resource Issues, Canadian Agricultural Economics Society, issue 1, pages 1-8, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Etilé, Fabrice & Teyssier, Sabrina, 2013. "Corporate social responsibility and the economics of consumer social responsibility," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 94(2).
    2. Andreas C. Drichoutis & Panagiotis Lazaridis & Rodolfo M. Nayga, 2009. "Would consumers value food-away-from-home products with nutritional labels?," Agribusiness, John Wiley & Sons, Ltd., vol. 25(4), pages 550-575.
    3. Dacinia Crina Petrescu & Iris Vermeir & Ruxandra Malina Petrescu-Mag, 2019. "Consumer Understanding of Food Quality, Healthiness, and Environmental Impact: A Cross-National Perspective," IJERPH, MDPI, vol. 17(1), pages 1-20, December.
    4. Verbeke, Wim & Ward, Ronald W., 2003. "Importance of EU Label Requirements: An Application of Ordered Probit Models to Belgium Beef Labels," 2003 Annual meeting, July 27-30, Montreal, Canada 22077, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Breeda Comyns & Frank Figge & Tobias Hahn & Ralf Barkemeyer, 2013. "Sustainability reporting: The role of “Search”, “Experience” and “Credence” information," Accounting Forum, Taylor & Francis Journals, vol. 37(3), pages 231-243, September.
    6. Benner, E. & Profeta, A. & Wirsig, A., 2009. "Die EU-Übergangsregelung zum Herkunftsschutz bei Agrarprodukten und Lebensmitteln aus dem Blickwinkel der Transaktions- und der Informationsökonomie," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 44, March.
    7. Benner, Dietrich, 2004. "Quality Ambiguity and the Market Mechanism for Credence Goods," Working Papers 98639, Universitaet Hohenheim, Institute of Agricultural Policy and Agricultural Markets.
    8. Chen, Xianwen & Alfnes , Frode & Rickertsen , Kyrre, 2015. "Labeling Farmed Seafood," Working Paper Series 10-2015, Norwegian University of Life Sciences, School of Economics and Business.
    9. Clare D’Souza & Emmanuel K. Yiridoe, 2019. "Producer’s Self-Declared Wind Energy ECO-Labeling Consequences on the Market: A Canadian Case Study," Sustainability, MDPI, vol. 11(5), pages 1-15, February.
    10. Moser, Riccarda & Raffaelli, Roberta & Thilmany, Dawn D., 2011. "Consumer Preferences for Fruit and Vegetables with Credence-Based Attributes: A Review," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 14(2), pages 1-22, May.
    11. Kariyawasam, Sumudu & Jayasinghe-Mudalige, Udith K. & Weerahewa, Jeevika, 2006. "Assessing Consumer Attitudes and Perceptions Towards Food Quality: The Case of Consumption of Tetra-Packed Fresh Milk in Sri Lanka," Annual Meeting, 2006, May 25-28, Montreal, Quebec 34173, Canadian Agricultural Economics Society.
    12. Cinzia COLAPINTO, 2006. "Market power and product quality: review of the literature," Departmental Working Papers 2006-35, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    13. Alessandro Bonanno & Carlo Russo & Luisa Menapace, 2018. "Market power and bargaining in agrifood markets: A review of emerging topics and tools," Agribusiness, John Wiley & Sons, Ltd., vol. 34(1), pages 6-23, December.
    14. Nilsson, Tomas K.H. & Foster, Kenneth A., 2005. "Certification of Pork Products," 2005 Annual meeting, July 24-27, Providence, RI 19350, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Mariola Grzybowska-Brzezińska & Dominika Kuberska & Magdalena Ankiel & Agnieszka Brelik, 2020. "Consumer’s Behavior in a Multi-Attribute Concept of a Food Product," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 526-551.
    16. repec:gbl:wpaper:2013-01 is not listed on IDEAS
    17. J. K. Pappalardo, 2022. "Economics of Consumer Protection: Contributions and Challenges in Estimating Consumer Injury and Evaluating Consumer Protection Policy," Journal of Consumer Policy, Springer, vol. 45(2), pages 201-238, June.
    18. Dhaval M. Dave, 2013. "Effects of Pharmaceutical Promotion: A Review and Assessment," NBER Working Papers 18830, National Bureau of Economic Research, Inc.
    19. Eunae Jung & Hyungun Sung, 2017. "The Influence of the Middle East Respiratory Syndrome Outbreak on Online and Offline Markets for Retail Sales," Sustainability, MDPI, vol. 9(3), pages 1-23, March.
    20. Pearson, David, 2003. "Australia Fresh fruits and vegetables: Why do so many of them remain unbranded?," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 11.
    21. Xujin Pu & Huanzhen Zhang, 2016. "Voluntary Certification of Agricultural Products in Competitive Markets: The Consideration of Boundedly Rational Consumers," Sustainability, MDPI, vol. 8(9), pages 1-13, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fpr:eptddp:69. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/ifprius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.