ARE U.S. CONSUMERS TOLERANT OF GM FOODS?

Genetically modified (GM) foods have caused many controversies. One important controversy relates to tolerance - the impurity rate that is tolerated before a commodity must be labeled as genetically modified. Currently, the United States does not have a specific tolerance or threshold level for GM foods. This paper uses experimental auctions to determine consumers' acceptance of non-GM foods with zero, 1 percent, and 5 percent tolerance for genetically modified material. Our results indicate that consumers would pay less for food that tolerates GM material, but the discount is not significantly different for foods with 1-percent and 5-percent GM content.