Premium
Willingness to Pay versus Willingness to Vote: Consumer and Voter Avoidance of Genetically Modified Foods
Author(s) -
Waterfield Gina,
Kaplan Scott,
Zilberman David
Publication year - 2020
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1002/ajae.12001
Subject(s) - willingness to pay , respondent , public economics , economics , externality , willingness to accept , business , marketing , microeconomics , political science , law
Many technologies face disapproval from some portion of the general public due to perceived risks or externalities. Individuals can respond to these controversial technologies either as consumers by choosing favorable alternatives or as voters by supporting regulation. We examine the relationship between willingness to pay a premium for products that avoid a controversial technology and willingness to vote in favor of a ban or mandatory labeling, with a focus on how this relationship is influenced by income and perceived risks. In a survey regarding genetically modified (GM) food, we find that the majority of respondents make consumer and voter choices that can be explained by a standard utility maximization framework. However, certain respondent characteristics are correlated with inconsistent choice patterns. In particular, low‐income voters appear to be overly supportive of regulation relative to their private willingness to pay. Voters who are uncertain about the safety of GM food also tend to be more in favor of regulation than their consumer choices would imply.