Role of Information on Consumers’ Willingness‐to‐pay for Genetically‐modified Rice with Health Benefits: An Application to China

• Date: 01 December 2013
• DOI: http://doi.org/10.1111/asej.12020
• Author: Shuyi Feng,Jeroen Buysse,Xavier Gellynck,Hans De Steur
• Published date: 01 December 2013

Role of Information on Consumers’

Willingness-to-pay for Genetically-modified

Rice with Health Benefits: An Application

to China*

Hans D. Steur, Jeroen Buysse, Shuyi Feng and Xavier Gellynck

Received 2 September 2011; accepted 18 July 2013

Despite their potential health benefits, the controversial nature surrounding the use

of GM technology in biofortified crops remains a subject of discussion. This paper

investigates the role of information on willingness-to-pay for folate-biofortified

rice in a Chinese folate-deficient region. We conducted second price auctions with

252 women of childbearing age, split up into two target groups based on street

(n=132, non-student sample) or school auctions (n=120, student sample).

Notwithstanding a general positive effect of folate-related information (i.e. content,

benefits and regional situation), evidence reveals that the non-student sample is less

concerned about GM technology. The results also provide insight into serial posi-

tion effects in conflicting GM information. Whereas participants in the non-student

sample are more prone to a primacy bias when receiving both positive and nega-

tive information, an alarmist reaction is observed in the student sample. This

study highlights the need for segmented, targeted communication strategies on

biofortification.

Keywords: China, economic valuation, experimental auctions, folate

biofortification, genetically modified rice, information effects, willingness-to-pay.

JEL classification codes: D44, D8, I1, M3.

doi: 10.1111/asej.12020

I. Introduction

The public debate about the application of biotechnology in food has generated a

large and growing body of research that explores consumers’ willingness-to-pay

(WTP) for genetically-modified (GM) or GM-free food products (Lusk et al.,

2005). Such valuations are closely related to consumers’ attitudes towards genetic

modification and vary within and across countries (Costa-Font et al., 2008).

Compared to the developed world, except for the USA (Gaskel et al., 1999),

*De Steur (corresponding author), Department of Agricultural Economics, Faculty of Bioscience

Engineering, Ghent University, Coupure Links 653, B-9000 Ghent, Belgium. Email: hans.desteur@

ugent.be; hansdesteur@hotmail.com. Buysse: Department of Agricultural Economics, Faculty of

Bioscience Engineering, Ghent University, Coupure Links 653, B-9000 Ghent, Belgium. Feng:

College of Public Administration, Nanjing Agricultural University, Weigang 1, Nanjing 210095,

China. Gellynck: Department of Agricultural Economics, Faculty of Bioscience Engineering, Ghent

University, Coupure Links 653, B-9000 Ghent, Belgium.

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Asian Economic Journal 2013, Vol. 27 No. 4, 391–408 391

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consumers from developing countries are more positively oriented towards GM

food (Paarlberg, 2002). However, consumers’ acceptance and purchase behavior

also differ according to the targeted GM food product. An important distinction

can be made between the so-called first and second generation of GM crops.

Whereas the former are primarily designed to benefit agricultural producers (e.g.

through improved agronomic traits, like pest resistance), the latter are targeted

towards consumers (e.g. through improved quality traits, such as an extended

shelf-life, or health traits) (Engel et al., 2002). Evidence shows that GM crops

with direct health benefits to consumers are more appreciated than those for

which only agronomic traits are improved (Lusk et al., 2005; Rousu et al., 2005).

Transgenic biofortified crops are an important type of these second-generation

GM products. Biofortification or breeding staple crops with improved micronutri-

ent levels is being increasingly promoted as a cost-effective health strategy to

alleviate the burden of malnutrition in poor, rural regions (Qaim et al., 2007; De

Steur et al., 2012). In this respect, GM technology has been recently applied to

enrich rice with folate (vitamin B9) (Storozhenko et al., 2007). This crop has the

potential to tackle folate deficiency and is particularly beneficial for women as it

prevents the risk of having a baby with a neural-tube defect (e.g. spina bifida)

(Blancquaert et al., 2010). As such, it could provide enormous health benefits in

poor rural regions where rice is a staple food (De Steur et al., 2010a). Despite the

high acceptance of biofortified crops in developing countries, whether they are

based on conventional (Stevens and Winter-Nelson, 2008) or GM breeding tech-

niques (De Steur et al., 2010b, 2013), more research is needed to examine whether

consumers, especially those who need it the most, would be willing to pay for it.

When examining purchase intentions of new, controversial products, whether

it is an irradiated food (Fox et al., 2002) or GM food with improved agronomic

traits (Rousu et al., 2005), information is extremely important. Provision of

positive information about GM technology generally leads to a higher WTP value

for GM food (Tegene et al., 2003; Colson et al., 2011) or a lower compensation

to accept GM food (Jaeger et al., 2004; Liu, 2009), and vice versa. If relevant

health or environmental benefits are mentioned, GM food is more likely to be

accepted (Frewer et al., 1996) or purchased (Jaeger et al., 2004; Lusk et al., 2004;

Hobbs et al., 2006). Similarly, nutritional information about biofortified products

increases consumers’ WTP (De Groote et al., 2010). However, such favorable

preferences might disappear when people are informed about the applied GM

technology (Depositario et al., 2009).

This paper investigates consumers’ trade-off between the potential health ben-

efits and the GM trait in folate-biofortified rice (FBR), and the role of information

in particular. Fourteen experimental auctions are applied to elicit consumers’

WTP through five non-repeated information treatments. The main objective of the

present paper is to analyze the effect of relevant information about the vitamin

content, the health benefits and the GM technology. Special attention is paid to

the provision of GM-related information. Therefore, positive, negative, objective

and conflicting GM information treatments are randomly distributed. Although

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© 2013 The Authors

Asian Economic Journal © 2013 East Asian Economic Association and Wiley Publishing Asia Pty Ltd