Consumption effects of genetic modification: what if consumers are right* Report as inadecuate




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This paper develops a model of differentiated consumers to examine the consumption effects of genetic modification (GM)under alternative labelling regimes and segregation enforcement scenarios. Analytical results show that if consumers perceiveGM products as being different than their traditional counterparts, GM affects consumer welfare and, thus, consumptiondecisions. When the existence of market imperfections in one or more stages of the supply chain prevents the transmissionof cost savings associated with the new technology to consumers, GM results in welfare losses for consumers. The analysisshows that the relative welfare ranking of.the 'no labelling' and 'mandatory labelling' regimes depends on: (i) the level ofconsumer aversion to GM products; (ii) the size of marketing and segregation costs under mandatory labelling; (iii) the shareof the GM product in total production; and (iv) the extent to which GM products are incotTectly labelled as non-GM products.© 2002 Elsevier Science B.V. All rights reserved.

Keywords: Consumer welfare ; Genetic modification ; Labelling ; Mislabelling ; Segregation costs

Subject(s): Food Consumption/Nutrition/Food Safety

Research and Development/Tech Change/Emerging Technologies

Issue Date: 2002-08

Publication Type: Journal Article

PURL Identifier: http://purl.umn.edu/177726 Published in: Agricultural Economics: The Journal of the International Association of Agricultural Economists, Volume 27, Issue 2 Page range: 97-109

Total Pages: 14

JEL Codes: Dll; D82; LIS; Q13; Ql8

Record appears in: International Association of Agricultural Economists (IAAE) > Agricultural Economics: The Journal of the International Association of Agricultural Economists





Author: Giannakas, Konstantinos ; Fulton, Murray

Source: http://ageconsearch.umn.edu/record/177726?ln=en







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