THE VALUE OF VERIFICABLE INFORMATION IN A CONTROVERSIAL MARKET: EVIDENCE FROM LAB AUCTIONS OF GENETICALLY MODIFIED FOOD

Two interested parties dominate the current debate on genetically modified (GM) foods: environmental groups and agribusiness companies. For the average consumer to arrive at an informed decision on these new foods, they must rely on information from interested parties. Unfortunately, information from interested parties does not provide an accurate picture of the benefits and risks of new products. This paper examines the effects of information on consumers' demand for new food products, GM-foods, in an environment where information from one or more interested parties is provided. We design and conduct laboratory auction experiments using randomly chosen adult consumers from two large metropolitan areas who are grouped into twelve experimental units and subjected to six randomly assigned information treatments. We find that in this environment, verifiable information has a small but positive value to sample consumers, and the projected annual social value to all processed foods consumed is relatively large for this public good. Such a large potential value may make it worthwhile for the United States to establish a new third party institution that would produce and distribute verifiable information on GM food.


Issue Date:
2002
Publication Type:
Working or Discussion Paper
Record Identifier:
http://ageconsearch.umn.edu/record/18212
PURL Identifier:
http://purl.umn.edu/18212
Total Pages:
54
Series Statement:
Working Papers Series #02003




 Record created 2017-04-01, last modified 2018-01-22

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