Effects and Value of Verifiable Information in a Controversial Market: Evidence from Lab Auctions of Genetically Modified Food

24 Pages Posted: 26 Jun 2007

See all articles by Matthew C Rousu

Matthew C Rousu

Susquehanna University - Economics

Wallace E. Huffman

Iowa State University - Department of Economics; University of Kiel - Department of Food Economics and Consumption Studies

Jason F. Shogren

University of Wyoming

Abebayehu Tegene

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Abstract

Food products containing genetically modified (GM) ingredients have entered the market over the past decade. The biotech industry and environmental groups have disseminated conflicting private information about GM foods. This paper develops a unique methodology for valuing independent third-party information in such a setting and applies this method to consumers willingness to pay for food products that might be GM. Data are collected from real consumers' in an auction market setting with randomized information and labeling treatments. The average value of third-party information per lab participant is small, but the public good value across U.S. consumers is shown to be quite large.

Suggested Citation

Rousu, Matthew C and Huffman, Wallace E. and Shogren, Jason F. and Tegene, Abebayehu, Effects and Value of Verifiable Information in a Controversial Market: Evidence from Lab Auctions of Genetically Modified Food. Economic Inquiry, Vol. 45, No. 3, pp. 409-432, July 2007, Available at SSRN: https://ssrn.com/abstract=994412 or http://dx.doi.org/10.1111/j.1465-7295.2007.00017.x

Matthew C Rousu (Contact Author)

Susquehanna University - Economics ( email )

Selinsgrove, PA 17870
United States
570 372-4186 (Phone)

Wallace E. Huffman

Iowa State University - Department of Economics ( email )

260 Heady Hall
Ames, IA 50011
United States
515-294-6359 (Phone)
515-294-0221 (Fax)

University of Kiel - Department of Food Economics and Consumption Studies

Olshausenstrasse 40
24098 Kiel, 24098
Germany

Jason F. Shogren

University of Wyoming ( email )

Department of Economics
BU292
Laramie, WY 82071-3985
United States
307-766-5430 (Phone)
307-766-5090 (Fax)

Abebayehu Tegene

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States

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