GMO Labeling: Threat or Opportunity?

Abstract

This paper examines the potential impact of both mandatory and voluntary labeling schemes on the research and commercialization of process-based and product-based GMO goods. The analysis concludes that mandatory labeling will impose excessive costs on the producers of GMO. This result would threaten the research and commercialization of GMO goods. In contrast, voluntary positive labeling of GMO-free goods, or of the presence of specific GMO attributes in goods would limit the producer costs. This result would be both commercially and socially optimal. Over the longer term, the labeling issue may diminish in importance when biotechnology is used to develop new product-based GMO goods with desirable attributes rather than simply to reduce costs of production.