The Influence of Environmental-Impact Information on Consumer Willingness to Pay for Products Labeled as Free of Genetically Modified Ingredients

Limited information is available about consumer willingness to pay for genetically modified food products. This in-formation is of immediate interest to the food industry. An experimental auction was conducted to assess willingness to pay for food items labeled as free of genetically modified ingredients and to evaluate the influence of positive and negative information about the impact of biotechnology on the environment. Two hypotheses were tested and rejected: 1) Participant bids for products labeled with a non-genetically modified ingredient guarantee equal those for tradition-ally labeled products, and 2) Information bias will not influence the willingness-to-pay differential between non-GM and traditionally labeled products. As application of genetic modification in crop varieties grows and expands in scope, participants throughout the marketing channel face new op-portunities and challenges associated with the development, use, and handling of the resultant products. They must evaluate the potential benefits, costs, and associated risks as part of their strategic decision-making process. For example, growers are faced with decisions about whether to grow genetically modified (GM) crops. Biotechnology companies must make investment decisions includ-ing research, commercialization, and marketing of GM technologies, organisms, and products. Food manufacturers must consider the use of commodi-ties produced with biotechnology and determine labeling and promotion strategies for resultant food products. Consumers have new choices as-sociated with food and other products produced with biotechnology. These and other stakeholders will benefit from information about consumer ac-ceptance of biotechnology and factors influencing it. This information will facilitate decision-making and reduce associated risks. Acceptance by consumers and participants at each step in the marketing channel is of paramount importance to the commercial success of products including GM ingredients or developed using bio-technology. However, there is little information available about the willingness of consumers to purchase GM food products (Lusk, Daniels, Mark