Differentiating the Consumer Benefits from Labelling of GM Food Products

Although recurrent evidence is found that consumers have different willingness to pay for GM and non-GM products, there is disagreement in the scientific community about the size of consumer benefits from GM labelling. In this article we use a theoretical model based on a standard constant elasticity of substitution (C.E.S.) to explain the importance of the quality effect. It is shown that failing to consider the quality effect may yield an overestimation of benefits from GM labelling, voluntary or mandatory.

Scatasta, Sara, Justus Wesseler and Jill Hobbs (2007), Differentiating the Consumer Benefits from Labelling of GM Food Products, Agricultural Economics 37 , 237-242