Should the United States Regulate Mandatory Labeling for Genetically Modified Foods? Evidence from Experimental Auctions
Rousu, M., Huffman, W. E., Shogren, J. F., & Tegene, A. (2003). Should the United States Regulate Mandatory Labeling for Genetically Modified Foods? Evidence from Experimental Auctions.
Public debate continues over how the United States should regulate labeling for genetically modified (GM) foods--mandatory versus voluntary labeling. This paper presents results from laboratory auction experiments of three food items where labeling and information treatments were randomly assigned to experimental units consisting of adult consumers. The results show that consumers behave as if they can accurately identify signals for GM foods, and imply that a voluntary labeling policy leads to higher social welfare. Thus, our results support the perspective that the United States has been prudent in fending off calls for regulations demanding a mandatory GM-labeling policy.