When a food item might be genetically modified (GM) and divergent information about risks and benefits exists, do U.S. consumers value information provided by a label? This paper addresses this question by designing and conducting an experimental auction to elicit consumers' willingness to pay for both GM-labeled and standard-labeled foods. The evidence gathered for vegetable oil, tortilla chips, and potatoes shows that labels matter, and in particular, consumers werewilling to pay about a 14 percent premium for food items they perceived as non-GM. We found that women and men have similar reactions to the GM-food labels, butthe sequencing of food labels, i.e., seeing GM-labels first orsecond, was statistically significant. If consumers bid onfoods with GM-food labels in the first oftwo rounds ofbidding, they on average reduced their bids.
Huffman, Wallace E.; Shogren, Jason F.; Rousu, Matthew; and Tegene, Abe, "The Value of Consumers of Genetically Modified Food Labels in a Market with Diverse Information: Evidence from Experimental Auctions" (2001). Economic Staff Paper Series. 344.