Consumer Acceptance and Willingness to Pay for Genetically Modified Foods: A MultiCountry Assessment

1
Consumer Acceptance and Willingness to Pay for
Genetically Modified Foods A Multi-Country
Assessment

• Wen S. Chern
• Department of Agricultural, Environmental and
  Development Economics
• The Ohio State University

2
This Presentation Addresses a Multi-Country
Survey on GM Foods

• Adoption of GM Varieties
• Review of GMO Labeling Regulations
• Student surveys in Norway, Japan, Taiwan, and the
  U.S.
• Public telephone surveys Norway and the U.S.
• Survey results
• Estimated willingness to pay (WTP) for Vegetable
  oil and salmon
• Implications

3
Adoption of GM Crops Has Been the Most Noted
Advancement in Biotechnology for Agricultural
Production

• Adoption Rates in of Planted Acreage, U.S.
• 1996 1997 1998 1999 2000 2001
• GM Soybeans
• HT 7.4 17 42 51 54
  68
• GM Corn
• Total 4.4 12 28 34 24
  23
• Bt 1.4 7.6 19.1 30
  18 18
• HT 3.0 4.3 18.4 8
  6 7
• GM Cotton
• Total NA 25.5 43.0 65 61
  69
• Bt 14.6 15.0 16.8 27
  15 13
• HT NA 10.5 26.2 38
  26 32

4
GM Foods Have Been Controversial

• In 1997, EU imposed mandatory labeling of GM
  foods.
• - 1 of GM content
• In 2001, Japan imposed mandatory labeling of GM
  foods.
• - 5 of GM content
• On March 20, 2002, China enacted Ag GMO
  Implementation Measures
• GMO has become one of the most contested issues
  in agricultural trade.

5
On July 3, 2002, European Parliament Backed Two
New Proposals Submitted by European Commission

• Extending labeling regulations to feed products
• Products such as soybean and rapeseed oils
  previously exempted due to the lack of presence
  of transgenic DNA are subject to proposed
  labeling regulations.
• But, products such as meats and eggs produced
  with GM feeds will still be exempted.

6
Consumer Acceptance of GM Foods Has Become a
Major Factor Affecting the Future of Biotech in
Agriculture

• Importance of understanding factors affecting
  consumer acceptance
• Little has been done in estimating WTP for GM vs.
  non-GM foods
• A joint research project was initiated to conduct
  a multi-Country survey on GM foods

7
Our Survey Project is Aimed at International
Comparison

• Investigate and compare consumer attitudes and
  acceptance toward GM foods in Norway, Japan, and
  Taiwan, and the U.S.
• Estimate consumer WTP for non-GM foods

8
Our Survey Methodology is Based on the Contingent
Valuation (CV)

• Survey Design
• -Knowledge and awareness of GM foods
• -Attitude and acceptance toward GM foods
• -Attitude toward GM food labeling
• -Willingness to consume GM foods
• -Closed-ended contingent valuation of WTP for
  vegetable oil, salmon, tofu, and corn flake
  breakfast cereal
• -Demographic characteristics

9
Four Student Surveys were Conducted in 2000-2001

• The same survey questionnaire initially written
  in English was translated into Norwegian,
  Japanese, and Chinese.
• A college student survey in Japan (Tsukuba
  University), Norway (Agricultural University of
  Norway), Taiwan (National Taiwan University), and
  the U.S. (The Ohio State University) (n 710)

10
Figure 1 Awareness of GM Foods and GMOs from
Student Surveys.
11
Figure 2 Testing of Knowledge on GMOs
12
Figure 3 Risk Perception of GM Foods on Human
Health
13
Figure 4Consumer Willingness to Consume GM Foods
14
Figure 5Consumer Willingness to Purchase GM
Products with Reduced Use of Pesticides
15
Figure 6Consumer Support for Labeling Type
16
Figure 7Consumer Willingness to Pay a Premium
for Foods Labeled as GM-Free
17
Student Respondents are Willing to Pay a High
Premium to Avoid GM Foods

• Estimated WTP for Premiums of Non-GM Vegetable
  oil
• Norway U.S. Japan Taiwan
• Reference size Liter 32Fl oz Standard
  600g
• WTP in US 1.51 1.13 0.88
  0.45
• of Premium 55-69 50-62 33-40 17-21

18
Two Public Telephone Surveys Were Later Conducted
in 2002

• Norway - 200 respondents in Oslo and Nordland
• U.S. - 250 respondents nationwide
• Conducted during March and April, 2002
• Similar questions as in the student surveys
• Soybean oil (non GM and GM)
• Salmon (non GM, GM-fed, and GM)
• Corn flake cereal (non GM and GM)

19
How well informed are you on GM foods or GMO?

• About 10 of Norwegians and 15 of Americans
  consider themselves very well informed.
• The low awareness corresponds well with the
  knowledge results (see below).

20
Statement Non-GM soybeans do not contain genes
while GM soybeans do.

• Around 40 in both economies answers correctly
  (false).
• More correct (and wrong) answers in the U.S.
• Young people know more. Students in the student
  survey knew even more.

21
Statement By eating GM foods, a person's genes
can be altered.

• More than 60 of Americans and around 35 of
  Norwegians answer correctly (false) while more
  Norwegians dont know.
• Students know more.

22
Risk Perception of GM Foods on Human Health

• Half of Americans and 60 of Norwegians believe
  that GM foods are risky. A third of Norwegians
  considered them extremely risky.
• A bit more than 20 found them safe.

23
How Willing Are You to Consume Foods Produced
with GM Ingredients?

• Only 30 of Norwegians and 43 of Americans claim
  to be willing to consume GM foods.
• A larger share of Norwegians are extremely
  unwilling (45) (and also extremely willing).
• Opposition reduced when explicit benefits are
  introduced.

24
Benefits How Willing Would You Be to Consume
GM foods if They Reduced the Use of Pesticides?

• Around 40 of Norwegians and 70 of Americans
  were willing to consume GM foods.
• Similar results with improved nutritional quality
  or reduced price.
• Reduced use of pesticides ranked as the most
  important benefit and price reductions as the
  least important benefit.

25
Concerns How Willing Would You Be to Purchase
GM Foods Given a Risk for allergicc Reactions?

• gt80 of Norwegians and 40 of Americans extremely
  unwilling.
• Ethical and religious concerns important for 30
  of Norwegians and 36 of Americans.

26
How Important is it to You that Food Products are
Specifically Labeled as GM?

• The majority (98 in Norway and 87 in the U.S.)
  demand labeling.
• 55 of Norwegians support labeling even if prices
  are increased by 5 or more.

27
Knowledge Matters! Distribution of Responses to
the Question How risky would you say GM foods
are in terms of risk for human health? by Answer
(True, False, or Dont Know) to Non-GM soybeans
do not contain genes while genetically modified
soybeans do.
28
Distribution of Responses to the Question How
willing are you to consume foods produced with GM
ingredients? by Answer (True, False, or Dont
Know) to Non-GM soybeans do not contain genes
while genetically modified soybeans do.
29
We Used Salmon in the Survey Beause Salmon is a
Very Interesting CaseWorld Production of
Salmon, 1980-2000
30
Norwegian Exports of Salmon by Destination
31
Composition of Feed in Salmon Farming
32
Three Stated Choice Experiments(i) Non-GM and
GM-Fed Salmon(ii) Non-GM and GM Salmon(iii)
Non-GM and GM Soybean Oil (Skipped)
33
Stated Choices at Identical Prices (Step 1),
Percentage Distribution for Each Choice
34
WTP to Avoid Alternative GM Salmon

• Alternative
• GM-fed Salmon GM Salmon
• U.S. Mean WTP 1.5 2.52
• of Premium 25 42
• Norway
• Mean WTP, NOK 43.42 53.96
• Mean WTP, US 5.43 6.75
• of Premium 54 67
• Note Base price 6.00 in U.S., NOK 80 in Norway

35
In Conclusion, the Attitudes, Perception, and WTP
for GM Foods Vary from Country to Country

• Americans and Taiwanese are more willing to
  consume GM foods than Norwegians and Japanese
• However, opinions in the U.S. are also quite
  mixed.
• The opposition is reduced when potential benefits
  associated with GM foods are introduced.
• Support for mandatory labeling.
• Consumers and students are willing to pay
  substantial premiums to avoid GM foods.
• Norwegians are willing to pay more than
  Americans.
• Is there a hypothetical bias (no real payments)?

36
The Survey Results and Estimated WTPs Have
Important Implications

• The attitude and perception of GM foods vary from
  Country to Country. One Country should not simply
  fellow what other economies are doing regarding
  GMO regulation.
• If the WTP for premium is high, the benefit of
  labeling regulation would be high also.
• Knowledge on GMOs matters We can change the
  perception by more public education.

37
We are Continuing to Expand our Research Efforts

• Our collaborators in Japan and Taiwan will soon
  conduct their pilot national surveys soon.
• Spain has joined our project.
• We will conduct a full scaled telephone survey
  with a much larger sample size.
• We will compute WTPs by demographic groups.