Direct and Indirect Effects of Mandatory GMO Disclosure with Existing Voluntary Non-GMO Labeling

46 Pages Posted: 18 Feb 2021 Last revised: 8 Nov 2021

See all articles by Aaron Adalja

Aaron Adalja

Cornell University; Cornell SC Johnson College of Business

Jura Liaukonyte

Cornell University

Emily Yucai Wang

University of Massachusetts, Amherst

Xinrong Zhu

University of Wisconsin-Madison

Date Written: November 6, 2021

Abstract

In 2022, all foods for sale in the US will be required to carry disclosure labels if they contain ingredients with genetically modified organisms (GMOs). While this is a significant change to labeling requirements, voluntary non-GMO labels already exist to facilitate consumer choice. Past legislative and voter-initiated measures in several states have proposed mandatory GMO labeling, with Vermont being the only state to successfully pass and implement such a law. We leverage a novel dataset from the Non-GMO Project to examine the direct effect of mandatory GMO labeling and the indirect effect of the associated legislative process on demand for voluntarily-labeled non-GMO products. We show that the legislative process heightened consumer awareness of GMO topics and increased adoption of products with voluntary non-GMO labels, even absent actual implementation of mandatory GMO labeling: about one-third of new non-GMO product adoption is explained by the local information environment. We then utilize implementation of the mandatory GMO labeling law in Vermont as a quasi-experiment to show that in the presence of existing voluntary non-GMO labels, mandatory labeling did not have any additional effect on demand. Our findings suggest that voluntary non-GMO labels may already provide an efficient disclosure mechanism without mandatory GMO labels.

Keywords: GMO Labeling, Difference-in-Differences, Synthetic Control, Policy Evaluation

Suggested Citation

Adalja, Aaron and Liaukonyte, Jura and Wang, Emily Yucai and Zhu, Xinrong, Direct and Indirect Effects of Mandatory GMO Disclosure with Existing Voluntary Non-GMO Labeling (November 6, 2021). Available at SSRN: https://ssrn.com/abstract=3774315 or http://dx.doi.org/10.2139/ssrn.3774315

Aaron Adalja

Cornell University ( email )

Ithaca, NY 14853
United States

HOME PAGE: http://https://sha.cornell.edu/faculty-research/faculty/aaa362/

Cornell SC Johnson College of Business ( email )

Ithaca, NY 14850
United States

Jura Liaukonyte (Contact Author)

Cornell University ( email )

347 Warren Hall
Ithaca, NY 14853
United States

Emily Yucai Wang

University of Massachusetts, Amherst ( email )

80 Campus Center Way
University of Massachusetts, Amherst
Amherst, MA 01003
United States
4135455741 (Phone)

Xinrong Zhu

University of Wisconsin-Madison ( email )

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