Consumer Response to Genetically Modified Foods: Market Segment Analysis and Implications for Producers and Policy Makers

By Baker, Gregory A.; Burnham, Thomas A. | Journal of Agricultural and Resource Economics, December 2001 | Go to article overview

Consumer Response to Genetically Modified Foods: Market Segment Analysis and Implications for Producers and Policy Makers


Baker, Gregory A., Burnham, Thomas A., Journal of Agricultural and Resource Economics


Conjoint analysis is used to elicit consumer preferences for attributes of genetically modified foods. Market segments are identified based on a cluster analysis of respondents' preferences for brand, price, and GMO content. A logit analysis is used to analyze consumer characteristics associated with the acceptance of GMO foods. Those consumers who were most risk averse, most likely to believe that GMOs improved the quality or safety of food, and most knowledgeable about biotechnology were the most likely to be accepting of GMO foods. These findings are used to develop implications for producers and regulators of GMO foods.

Key words: conjoint analysis, consumer behavior, genetically modified food, genetically modified organisms, GMO

Introduction

Over the past decade or so, U.S. consumers have exhibited a high level of concern regarding the safety of the food supply. Consumers and consumer activist groups have increasingly called for assurances that food is free from substances such as pesticides, chemical additives, hormones, and antibiotics. Most consumers apparently accept and reap the benefits of chemicals used in food production resulting in cosmetically perfect fruits and vegetables at low prices. However, some consumers prefer organic produce, and producers have responded by developing a niche market to serve their needs. Recently, the U.S. Department of Agriculture (USDA) issued the final rule which will govern the production and sale of organic foods in the United States.

The threat of foods that are the product of genetically modified organisms (GMOs) has been the source of consumer fears in the United States and Europe. Incidents such as the inadvertent introduction of the genetically modified StarLink corn into taco shells have served to heighten consumer awareness regarding GMO foods. There is a need to understand what consumers want, and want to avoid, with respect to GMO foods as well as the consumer characteristics associated with concern for GMOs.

Such an understanding of the relationships between consumer characteristics and food safety concerns is important for several reasons. It may be used to guide the development of food safety policies and regulations, to develop products which address consumer needs, to target informational programs, and to design promotional or advertising campaigns. This research is especially important because of the pace of GMO adoption and because it will soon be difficult, if not impossible, to maintain separate products based on the presence or absence of GMO content (Barboza).

Many studies have been undertaken to develop an understanding of the relationship between consumer characteristics and the level of consumer concern for various food safety risks. Most of these studies have focused on socioeconomic factors. Table 1 summarizes the results from 10 such studies (Ott; Byrne, Gempesaw, and Toensmeyer; Misra, Huang, and Ott; Baker and Crosbie; Huang, Kan, and Fu; Nayga; Baker; McGuirk, Preston, and McCormick; Lin; Kaiser, Scherer, and Barbano) for six socioeconomic factors (age, presence of children in the household, educational level, ethnicity, gender, and income).

While the table serves as a convenient device to illustrate the relationships between consumer characteristics and the concern for food safety, caution should be used in interpreting the table since the presentation masks the many differences among the studies. For example, seven of the studies focused on the risk due to pesticides; two studies examined consumer concern for food safety in general; the remaining study explored consumer concern due to bovine somatotropin (bST). Furthermore, other differences-including how the dependent variables were measured, the measure and measurement method ofthe independent variables, statistical methods employed, sample size, and the type of sample-may have contributed to differences in the studies' conclusions. Several of the studies reported in table 1 also elicited responses to non-socioeconomic questions regarding participants' knowledge or attitudes. …

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