Genetically Modified Foods With the Emphasis Lately

¶ … Genetically Modified Foods

With the emphasis lately on stem-cell research and cloning, consumer interest seems to have waned about genetically altered fruits and vegetables. Or has it? The answer to this question is of interest to a wide range of consumer businesses and organizations and R& D. agricultural firms due to the socio-economic impact. According to a peer-reviewed article in the American Journal of Agricultural Economics, "Who do consumers trust for information: the case for genetically modified foods?," by agriculture and economics professors at several U.S. universities, the United States Department of Agriculture and Monsanto company, determining the answer to this query not relatively easy. As the article states, "the introduction of new goods, however, creates a disequlibrium (Hausman, 1996), which in turn creates a demand by economic agents for objective information to assist in making decisions on adoption and use (Schultz, 1975). The consumer's challenge is to sort through the various, competing and sometimes conflicting, sources of information."

Over the past several years, consumers read contrasting information regarding the positive and negative aspects of genetically modified (GM) foods. Agricultural biotechnology companies such as Monsanto and Syngenta as well as industry organizations lauded the use of biotechnology to create new products, claiming that this reduces food costs worldwide and improves environmental quality. To the contrary, NGOs Greenpeace and Friends of the Earth distributed information through the WWW and press on the demonstrated risks of GM to human health, environment and biodiversity. They also claim that such new technology only benefits multinationals and not consumers. The FDA recommended voluntary labeling for genetically modified foods.

Companies and organizations disseminate disparate information hoping to impact consumer decisions on products. However, to be influential these groups must garner "trust." Glaeser et al. (2000) show that individuals who are closer in social status or have similar personal capital are more likely to trust one another. For example, people raised with a particular religious tradition place more trust in those raised within the same religious tradition. Becker (1996) argues that a consumer's social and personal capital is an essential determinant of preferences. Social capital is defined as the capital individuals acquire through surroundings, upbringing and social network. Human capital is capital individuals personally acquire, such as schooling, habits, or experience. "Understanding the formation of trust in information sources is an important step in understanding consumers' preferences for information on new products" (Huffman, 2004).

With the aid of a model, this article authors formulated hypotheses about the role of consumer measurable attributes related to household income, personal and social capital, and prior beliefs in trust formation. Data were collected from a random sample of 318 adults from two major Midwestern cities. These individuals provided social-demographic information and answers on prior beliefs about technologies and participated in a set of experiments. They then completed a short questionnaire on: "If a source of information were to give you verifiable information on genetically modified foods, who would you trust most?" This information was coded into the categories of third-party, government, environmental or consumer group, private industry or organization, none or nobody, and "other" (including no response).

An econometric model was used to establish linkages of trust to provide verifiable information on genetically modified foods. Five regressors were included in this multinomial logit model: a participant's household income, education, age, a dummy variable for prior beliefs, and a dummy for conservative religious affiliation. Results showed that well educated individuals more likely trust an "independent third-party." Also, increasing a participant's schooling significantly lowers the odds of trust of government, private industry, or no "body," and "other" relative to a third-party source. As people age, the odds they trust an environmental or consumer group or "nobody" falls significantly relative to trusting a third-party source. Participants with a strict religious upbringing have significantly lower odds of trusting private industry and higher odds of trusting "nobody" relative to a third-party source.