Academic journal article Journal of Agricultural and Resource Economics

Actual Media Reports on GM Foods and Chinese Consumers' Willingness to Pay for GM Soybean Oil

Academic journal article Journal of Agricultural and Resource Economics

Actual Media Reports on GM Foods and Chinese Consumers' Willingness to Pay for GM Soybean Oil

Article excerpt

Information has been proven to have significant impacts on consumers' behavior and willingness to pay (WTP). In this study, information on GM soybean oil is given in the form of real-life cases involving GM food. These cases are recorded from actual media reports. Using a hybrid of the double-bounded and payment card elicitation approaches, Chinese consumers' WTP for soybean oil is examined both before and after these cases are presented to them. Results indicate that media reports on positive cases do not increase consumers' WTP significantly, while reports on negative cases drastically lower their WTP.

Key words: Chinese consumers, double-bounded, soybean oil, willingness to pay

Introduction

Over the past decade, genetic modification (GM) has become a considerably controversial yet widely applied technique in agricultural production. One striking characteristic associated with GM food is the presence of credence attributes with uncertain quality, and consumers often attach risks to the consumption of GM food (Lusk and Coble, 2005). Due to these uncertainties, information becomes crucial. Information may be reflected by labels, claims, or other types of verbal or nonverbal communication, and plays an important role in guiding the market. In economics, the role of information on consumers' acceptance and purchasing intentions for GM food, and consequently on the potential market, has emerged as one of the most focused current research areas (Noussair, Robin, and Ruffleux, 2004; Rousu et al., 2004; Huffman et al., 2003,2004; Hu, Chen, and Yoshida, 2006). In most of these studies, product information is generally synthesized by the researchers and then given in an abstract form. Although the language is often adjusted to suit the general public, statements on GM are usually presented in a plain-fact manner as most often seen in scientific reports. However, this may not be the most comfortable and common way consumers acquire information about GM food.

In the most popular media-such as TV, the internet, newspapers, radio, and magazines-consumers are likely to learn GM-related information through many real-life cases involving GM food. Unlike information printed on a product label, these real-life reports often involve stories or summaries of cases that have occurred around the world, offering a wide variety of content or background. These cases may trigger either positive or negative reactions by consumers toward GM food. From the psychological perspective of decision making, information must be assimilated and processed by consumers, allowing the resulting perceptions or attitudes formed by consumers to determine their choices. This perspective implies that witnessing actual real-life examples might be just as relevant as "plain facts" in consumers' decision-making processes (Manski, 2000). In terms of product marketing, relevant information spreads much faster through the popular media than through product labels.

The approach of this study differs from previous research by introducing real-life cases involving GM food to consumers in a format that can be seen or heard in the popular media. Accordingly, we seek to capture practical implications associated with understanding how consumers respond to real-life cases.

Soybean oil is chosen as the target product for this analysis due to its popularity among Chinese consumers. Prior to this study, soybean oil explicitly labeled as GM has not been sold in the Chinese market. Therefore, bidding experiments are used to elicit consumers' willingness to pay (WTP) for oil that may be produced from GM oilseeds [e.g., see McCluskey et al. (2005) for the case of tested beef in Japan].1 Consumers' WTP is obtained both before and after they are exposed to real-life case reports recorded from the media. Since these cases may generate either positive or negative reactions by consumers, they are grouped and presented separately to experiment participants. …

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