The signaling effect of mandatory labels on genetically engineered food

It has been suggested that the adoption of mandatory labeling for genetically engineered food might send a signal to consumers that foods produced with biotechnology are unsafe or should be avoided. To date, however, there is little empirical evidence to substantiate this claim. This paper utilized data from two studies to explore whether consumers exposed to labels on genetically engineered foods expressed greater aversion to genetic engineering than consumers in control groups, who were exposed to decoy labels unrelated to the technology. We find little evidence of a signaling effect resulting from the mere exposure to labels. However, in Study 1, we find signaling operating in another fashion: there were stark differences in the implied willingness-to-pay to avoid genetically engineered foods when consumers were exposed to mandatory “contains” labels vs. voluntary “does not contain” labels. In study 1, we also find aversion to a non-GE technology - ethylene ripening - that is comparable to aversion to biotechnology.