Improving nutrient content through genetic modification: Evidence from experimental auctions on consumer acceptance and willingness to pay for intragenic foods

After more than a decade of experience in the global marketplace, genetically modified (GM) foods continue to be controversial. Early GM traits were obtained by transferring genes across species, largely from soil bacteria, and this transgenic nature is one dimension of consumer resistance. Recently, breakthroughs have occurred using intragenic bioengineering where genes are moved long distances within specie and without antibiotic markers. These new intragenic bioengineering methods offer the potential for new commercial crop varieties with traits of direct value to consumers (e.g., enhanced nutrition) without reliance on outside foreign genetic material. To assess the potential market for new intragenic foods, a series of multiple-round random nth-price experimental auctions were conducted in the spring of 2007 on randomly chosen adult consumers with randomized food label and information treatments. Using the data collected through the experimental auctions, this dissertation assesses several issues including: (1) consumers\u27 willingness to pay (WTP) for GM food products with and without enhanced antioxidant and vitamin C levels, (2) the impact of controversial and verifiable information on consumers\u27 WTP, (3) the public good value of verifiable information about GM, (4) the welfare impact of alternative labeling policies for GM foods, and (5) the impact of outside-the-auction consumer held product inventories on bids in food experiments. Results indicate that consumers are willing to pay significantly more for intragenic GM vegetables with enhanced nutrition than for a conventional product. This suggests that there is potential for new intragenic foods to find acceptance among consumers and that the food industry for the first time potentially has an incentive to voluntarily label GM foods as GM. The consumer welfare gains from labeling policies that differentiate intragenic and transgenic are quantified. However, the information available to consumers when making product purchase decisions is shown to have a significant impact on private valuations, thus potentially eroding demand for intragenic foods. Verifiable information from independent third-party organizations is shown to have value to consumers through enabling more informed product choices

Analyzing pork purchases at the point of sale – The role of consumer involvement

Involvement is an important psychological construct for understanding consumers’ underlying purchase decision process and those factors that shape product perceptions. In order to better understand consumer purchase behavior for low and high priced pork cuts, a series of field interviews at a variety of food retailers were conducted with actual pork shoppers using the New Involvement Profile (NIP) developed by Jain and Srinivasan (1990). In addition to responses to a series of questions designed to assess consumers’ involvement when purchasing pork, informational elements including socio-demographic information and pork attributes (e.g., origin, advertisement, on sale) were also included in the analysis. Key results from the study show individuals with high risk factors were significantly less likely to purchase high price cuts of pork. However this factor was mitigated by high price cuts on sale. Advertising is found to engage consumers with specific factors including those individuals who place a symbolic value on pork. Similar results are found for certain individuals based upon the type of store in which shopping took place. Results from our study may help companies to develop specific strategies to target high and low involved consumer segments. For instance, focusing on particular labeling schemes to increase consumers’ trust in meat producers could be used to target high involved shoppers. Additionally, based upon the empirical evidence this would have an added benefit by supporting the purchase of higher priced cuts of pork.pork, purchase behavior, consumer involvement, point of sale, Agribusiness, Consumer/Household Economics, Marketing, C93, D12, Q13,

Considering Macroeconomic Indicators in the Food versus Fuel Issues

In this study, a Structural Vector Autoregression model (SVAR) is employed to decompose how supply/demand structural shocks affect food and fuel prices within fuel and corn markets. Results indicate that the relative importance of each structural shock in explaining the variation of corn prices is different. Our findings support the hypothesis that corn prices increase as a response to those positive demand shocks in the short run, while in the long run, global competitive agricultural commodities markets as well as positive supply shocks respond to commodity price shocks, restoring prices to its long-run trends. In conclusion, fundamental market forces of demand and supply as well as real economic aggregated demand shocks were the main contributors of the 2007-2008 food price spike.Food, fuel, Food Consumption/Nutrition/Food Safety, Resource /Energy Economics and Policy,

Estimates of the Welfare Impact of Intragenic and Transgenic GM Labeling Policies

Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety,

Who cares about food origin? A comparison of hypothetical survey responses and actual shopping behavior

This paper explores the relevance of food origin to consumers when making product purchase decisions. We use data from a survey of pork shoppers at the point of sale of five food retailers in Germany. Participants engaged in both a hypothetical survey eliciting evaluations of the importance of different pork attributes and a series of questions related to their knowledge about the attributes of their actual purchase of pork. This enables us to compare hypothetical responses with actual purchase behavior. The results show that origin indeed is a relevant attribute to a subset of consumers. A share of consumers does pay attention to origin labels and is willing to undertake costly search for origin information. Furthermore, the data give evidence that there is a strong, but not perfect, degree of agreement between hypothetical survey responses and actual shopping behavior. This result is supportive of the use of experimental methods.hypothetical survey responses, actual shopping behavior, pork, origin labeling, Consumer/Household Economics, Research Methods/ Statistical Methods,

Demand Curve Effects in Experimental Auctions: The Effect of Quantity Already Owned

Most studies utilizing experimental auction mechanisms to elicit consumers’ willingness to pay are designed to avoid potential substitution or demand-curve effects that may influence bid prices. However, previous research and auction designs have not considered the potential impact on bid prices of commodity inventories held by auction participants that were obtained through transactions outside of the auction. This omission may present a problem for interpreting and analyzing auction data. Using bids from a random nth-price auction of fresh vegetables conducted in a laboratory style setting, we test whether participants’ outside inventories affect bidding behavior. We find that bidders do in fact consider their inventories, resulting in lower bid prices by individuals with quantity already owned.Consumer/Household Economics, Demand and Price Analysis,

Improving the Nutrient Content of Food through Genetic Modification: Evidence from Experimental Auctions on Consumer Acceptance

This paper assesses consumers’ acceptance of nutritionally enhanced vegetables using a series of auction experiments administered to a random sample of adult consumers. Evidence suggests that consumers are willing to pay significantly more for fresh produce with labels signaling enhanced levels of antioxidants and vitamin C achieved by moving genes from within the species, as opposed to across species. However, this premium is significantly affected by diverse information treatments injected into the experiments.Bayesian analysis, experimental auction, food products, genetic modification, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety,

A Return of the Threshing Ring? Motivations, Benefits and Challenges of Machinery and Labor Sharing Arrangements

Cooperative approaches provide an alternative for small- and medium-sized producers to obtain the efficiencies of large farming operations and remain competitive in an increasingly concentrated agricultural industry. This article examines the motivation and effectiveness of equipment and labor sharing arrangements in the Midwestern US. Case study evidence shows that in addition to cost savings, access to skilled, seasonal labor is an important motivation for farm-level cooperation. Key factors identified for successful cooperative agreements include compatibility of operations and members' willingness to communicate and adapt. Sharing resources is found to improve farm profitability, efficiency and farmers' quality of life.machinery sharing; skilled farm labor; productivity; farm-level cooperations

A Return of the Threshing Ring? A Case Study of Machinery and Labor-Sharing in Midwestern Farms

Machinery-sharing provides an alternative for smaller producers to obtain the efficiencies of large farming operations and remain competitive in an increasingly concentrated agricultural industry. This research uses a multiple case study design to examine the motivations for sharing equipment and labor among farms and to better understand how group members handle the transaction costs of sharing. Our case evidence finds that in addition to cost savings, access to reliable labor is an important motivation for participating in a sharing arrangement. Trust and frequent communication among group members helps to minimize the transaction costs incurred from sharing.machinery sharing, transaction costs, farm-level cooperation, Agribusiness, Agricultural Finance, Community/Rural/Urban Development, Crop Production/Industries, Farm Management, Financial Economics, Labor and Human Capital, Land Economics/Use, Production Economics, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, Q12, Q13,

An Ethanol Blend Wall Shift is Prone to Increase Petroleum Gasoline Demand

The US Environmental Protection Agency announced a waiver allowing an increase in the Fuel-Ethanol blend limit (the “blend wall” ) from 10% (E10) to 15% (E15) on October,2010.Justifications for the waiver are reduced vehicle fuel prices and less consumption of petroleum gasoline, leading to energy security. In this paper, employing Monte Carlo simulations and Savitzky-Golay smoothing filter, an empirical study examines this waiver revealing an anomaly where a relaxation of this blend wall elicits a demand response. Under a wide range of elasticities, this demand response can actually increase the consumption of petroleum gasoline and thus lead to greater energy insecurity. The economics supporting this result and associated policy implications are developed and discussed.Blend wall, Energy security, Ethanol, Resource /Energy Economics and Policy,