A choice experiment on consumer perceptions of three generations of genetically modified foods

Abstract

Genetically modified (GM) foods remain a contentious issue worldwide, yet consumer preferences in this field have received too little attention in the academic research. The present paper helps fill this gap by investigating the hypothetical consumer behaviour towards and willingness to pay (WTP) for a specific type of GM food (of the first, second or third generation) using a choice experiment with 1444 respondents from three European cities. A random parameter logit-error component (RPL-EC) model allows for heterogeneity in consumer preferences and potential correlation across utilities and across taste parameters. The results show that consumers seem to attach utility to GM foods insofar as they perceive that generational traits improve their nutritional qualities or bring health benefits. Moreover, the role played by education in improving people's understanding of the issues associated with GM foods provides insights to assist marketers in developing differentiated strategies. Marketers would be able to help consumers dampen the effect of fear and allow them to develop more informed opinions, which, however, do not necessarily translate into purchasing behaviour.

Keywords: Consumer behaviour; Correlation; Experimental economics; Preference heterogeneity; RPL-EC model; Willingness to pay.