Public policy and endogenous beliefs: the case of genetically modified food

When individuals have limited information and are uncertain about the quality of a good, government policy, or the lack thereof, can serve as a signal to consumers about the likelihood of realizing alternative states of nature. In this paper, we focus on a controversial market characterized by uncer...

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Bibliographic Details
Published inThe Australian journal of agricultural and resource economics Vol. 33; pp. 270 - 289
Main Authors Lusk, J.L., Rozan, Anne
Format Journal Article
LanguageEnglish
Published Wiley 2008
Subjects
Environmental Sciences
BIOTECHNOLOGY
CEMAGREF
TRI-VARIATE PROBIT
GENETICALLY MODIFIED FOOD
CGSLY
FOOD LABELING POLICY
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Summary:When individuals have limited information and are uncertain about the quality of a good, government policy, or the lack thereof, can serve as a signal to consumers about the likelihood of realizing alternative states of nature. In this paper, we focus on a controversial market characterized by uncertainty and for which consumers have diverse beliefs about government intervention: the market for genetically modified food. Data from a mail survey were used to estimate an econometric model where beliefs about labeling policy, beliefs about the safety of genetically modified food, and willingness to consume genetically modified food are endogenously determined. Results indicate that consumers who believe the government has a mandatory labeling policy for genetically modified food are more likely to believe that genetically modified food is unsafe than consumers who believe no such policy is in place.
ISSN:1364-985X
1467-8489