AgBioForum, vol. 18, no. 3 (2015)
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Item Willingness to pay for organic food products and organic purity : experimental evidence(University of Missouri, College of Agriculture, Food and Natural Resources, 2015) Strzok, Jesse L.; Huffman, Wallace E.The market for organic products has grown rapidly over the past decade, and such products are now available not only in specialty stores but also in large grocery stores, supermarkets, and big-box super stores. The objective of this study is to estimate consumer willingness-to-pay for organic foods with varying purity levels relative to conventional foods and test the power of socioeconomic attributes of consumers to explain the willingness-to-pay premiums for organic food items. The study uses unique information collected from experimental lab auctions conducted on 129 adults 18-65 years of age. The commodities are coffee, maple syrup, and olive oil, which were available in different organic purity levels. The empirical results show that consumers are, in general, willing to pay significantly more for organic than conventional products but not for purity levels beyond the 95% organic standard set by the USDA. Consumers who had more education, were a college student, were a member of an environmental group, or were from a household with higher per-capita income were willing to pay significantly higher premiums for organic relative to conventional products. Given that it costs significantly more to produce, handle, monitor for truthful labeling, and display foods with 99% or 100% organic purity, especially for fruits, vegetables, grains, oilseeds, fresh meat, and eggs foods, relative to 95% organic products, the retail market for 100% organic purity is expected to remain small. Moreover, it seems that social welfare might increase if 100% organic produce were to be eliminated from US retail food stores.Item Does the packaging make the product? Identifying consumers' preference for "natural" in packaging(University of Missouri, College of Agriculture, Food and Natural Resources, 2015) Grebitus, Carola; Jensen, Helen H.; Roosen, Jutta; Sebranek, Joseph G.Today's consumer is interested in safe food products and foods with "natural" ingredients. The main objective of this study was to determine consumers' purchasing decisions for ground beef labeled with different packaging technologies, specifically modified atmosphere packaging using carbon monoxide in the package atmosphere and "natural" ingredients such as rosemary extract. Choice experiments with ground beef, conducted in Germany, were used to quantify consumers' valuations of the technology-related attributes of shelf life, color, and types of packaging. Consumers placed positive values on extended shelf life and light red and cherry red colors. However, informing consumers about the specific technologies used altered their preferences for the benefits of the associated technology. Our findings suggest that consumers place a positive value on the use of the technology, yet may be confused about the use of a technology that cannot be distinguished from the product itself. This response indicates that consumer trust in the product is diluted. Understanding consumer response to information and labeling is key to developing effective policies on product labeling and warnings.Item Consumer preferences, ecolabels, and effects of negative environmental information(University of Missouri, College of Agriculture, Food and Natural Resources, 2015) Chen, Xianwen; Alfnes, Frode; Rickertsen, KyrreConsumers prefer ecolabeled products. However, little is known about the effects of ecolabels when consumers are simultaneously exposed to negative environmental information about the ecolabeled products. We conducted a stated choice experiment in France with eight types of fish that were either ecolabeled or unlabeled. Four treatments with different types of information concerning potential negative environmental effects of wild fisheries and/or fish farming were used. We found that participants were willing to pay a 4% premium for Marine Stewardship Council labeled wild cod, and a premium of about 11% for Agriculture Biologique labeled farmed salmon and farmed cod. However, when participants receive negative environmental information on farmed fish or harvesting wild species, willingness to pay falls by more than the positive effect of ecolabeling. This implies that the ecolabeling organizations need to improve consumers' trust in their labels. Public authorities can also play a more active role in developing trust in ecolabels.Item Fifteen years of experimental auctions of GM foods : what have we learned about policy, preferences, and auction design?(University of Missouri, College of Agriculture, Food and Natural Resources, 2015) Rousu, Matthew C.It was a coincidence that GM foods became ubiquitous at the same time that researchers started using experimental auctions to study consumer preferences for food products. We explore the history of experimental auctions used to study GM food products and how the insights gained have been useful to policy makers. We also examine how experimental auctions of GM food products helped researchers gain insight both into consumer behavior and into best practices for experimental auctions.Item The loss from underutilizing GM technologies(University of Missouri, College of Agriculture, Food and Natural Resources, 2015) Zilberman, David; Kaplan, Scott; Wesseler, JustusThis article introduces a framework based on a real-option approach to assess the economics of delaying the introduction of genetically modified (GM) technologies in agriculture due to concerns about their unintended effects (unexpected environmental side effects). We applied our framework to analyze the consequences of delaying the introduction of Golden Rice, GM corn in much of the world, and GM wheat and rice globally. In the case of Golden Rice, we found that delay of more than 10 years of introduction of the technology may result in several millions of eyesights lost. The damage of the technology must be greater than between $2.7 and $29 billion of discounted net benefits expected to be gained from the technology under various assumptions. The analysis also suggests that restriction of the adoption of GM in corn, rice, and wheat is justified if the net present value of the damage is above $300 billion to $1.22 trillion, depending on assumptions about impacts and interest rate. Finally, the value of information gained in this year must be at least between $27 and $82 billion to justify the one-year delay in the introduction of GMOs. The analysis shows that precaution is very costly.