GMO and non-GMO Labeling Effects: Evidence from a Quasi-Natural Experiment
Marketing Science 0(0). https://doi.org/10.1287/mksc.2022.1375
52 Pages Posted: 18 Feb 2021 Last revised: 7 Nov 2022
Date Written: March 4, 2022
The United States recently mandated disclosure labels on all foods that contain genetically modified organisms (GMOs), despite longstanding, widespread use of voluntary third-party non-GMO labeling. We leverage the earlier passage and implementation of a mandatory GMO labeling law in Vermont as a quasi-natural experiment to show that adding this mandatory labeling into a market with pre-existing voluntary non-GMO labels had no effect on demand. Instead, the legislative process made consumers aware of GMO topics and increased non-GMO product sales, before the GMO labeling mandate went into effect. The GMO-related legislative processes also increased non-GMO product demand in other states that considered, but did not implement, GMO labeling mandates. We find that 36% of new non-GMO product adoption can be explained by differences in consumer awareness tied to legislative activity. Our findings suggest that voluntary non-GMO labels may have provided an efficient disclosure mechanism without mandatory GMO labels.
Keywords: GMO Labeling, Difference-in-Differences, Synthetic Control, Policy Evaluation
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