GMO labeling: Text vs. QR codes

Taken together, these results indicate that respondents were willing to pay a premium for food products with labels that communicate the absence of GM [genetically modified] material relative to GM labels. Furthermore, there was a premium associated with a QR code compared to text communicating the presence of GM. Thus, respondents reacted more negatively to text that communicates the presence of GM relative to a QR code that must be scanned. We should note that we do not know if respondents scanned the QR codes, but it seems unlikely that all respondents did, given the premium associated with the QR code. While this may seem strange, we chose to use an experimental design similar to the purchasing environment for consumers after the establishment of the NBFDS. Finally, comparing these results for the two products reveals that consumers are more sensitive to GM whole foods than GM manufactured foods.

That's from a new paper I co-authored with Brandon Mcfadden, which was just released by the journal Applied Economic Perspectives and Policy.  The work was motivated by the National Bioengineered Food Disclosure Standard (NBFDS), which was signed into law in last summer and has yet to be implemented.  Under the current wording of the NBFDS, companies may disclose the presence of GMO material by text, symbol, or an electronic digital link like a Quick Response (QR) code. 

To investigate how consumers might respond to these new "contains GMO" labels compared to existing labels indicating absence of GMOs (organic and non-GMO project verified), we conducted a survey of over 1,100 US food consumers.  We asked people how much they were willing to pay for whole and processed foods, and we randomly assigned people to different treatments where the food labels systematically varied.  Here is how willingness-to-pay (WTP) premiums varied for different labels placed on granola bars (the full text has a similar figure for apples).


Aside from treatment 5 (which seems something of an aberration), WTP premiums for organic or non-GMO are higher when GMOs are disclosed via text vs. QR code.  Also note that combined organic and non-GMO labels aren't much different than when either label is used in isolation (I blogged on this result last week).  

Given that mandatory GMO labels are coming, food companies will need to decide how to respond.  Below is a flow chart Brandon put together describingthe options available to food companies who are currently sourcing GMO ingredients.  Hopefully these research results will be useful in deciding which decisions to make.