A graph from the study "Effects of the National Bioengineered Food Disclosure Standard: Willingness To Pay for Labels that Communicate the Presence or Absence of Genetic Modification" shows the difference in what consumers will spend on products based on their labels. (Graph courtesy of Applied Economic Perspectives and Policy)
Consumers see organic and non-GMO labels as interchangeable, according to a study published in the journal Applied Economic Perspectives and Policy.
University of Florida assistant professor of food and resource economics Brandon McFadden and Purdue University agricultural economics department head Jayson Lusk came to that conclusion during their research on the best ways to communicate whether a product has genetically modified ingredients, according to a news release.
McFadden and Lusk surveyed more than 1,100 people about what they would pay for a pack of granola bars or a pound of apples based on their labels.
“For apples, the results revealed large and statistically significant substitution effects for Non-GMO (Project Verified) and USDA organic labels,” the authors stated in the paper. “In fact, results indicated that the two are almost perfect substitutes as (willingness to pay) premiums for apples with both Non-GMO and USDA organic labels are roughly the same as (willingness to pay) premiums for apples that display only one label.”
McFadden and Lusk also found consumers will pay more for a product with a quick-response code disclosing the presence of genetically modified ingredients than they will pay for one labeled with text disclosing the presence of genetically modified ingredients, suggesting QR codes are not scanned often, according to the paper.
The authors noted that future research in this area will likely be warranted.
“It is not yet obvious if all companies not sourcing GM material will choose to communicate the absence, or how these companies will communicate the absence if not choosing to differentiate by becoming Non-GMO Project verified or USDA Organic certified,” McFadden and Lusk wrote. “This study determined differences in (willingness to pay) between labels mandated by the (National Bioengineered Food Disclosure Standard) and the Non-GMO Project and/or USDA organic labels.
“The results are relevant to food companies deciding what inputs to source after the establishment of the NBFDS, policymakers deciding if QR codes will be an appropriate form of disclosure, and consumers benefits from the label configurations most valued,” McFadden and Lusk wrote.