Disaggregating consumer demand for organic and genetically modified foods using the Choice Modelling technique

Issues concerning consumer demands for genetically modified and organic food remain highly topical in Australia. It is unclear how consumers perceive issues associated with food production such as food safety, environmental impacts or animal welfare. It is also unclear how consumers might value potential changes in those issues. This paper reports on research using the choice modelling technique to estimate and compare consumer demand for genetically modified and organic foods and the contingent valuation method to estimate the value of taking a precautionary approach to the release of additional genetically modified organisms in Australian agriculture.

The choice modelling case study considers commodities including tomatoes, milk and beef produced from conventional, organic and genetically modified production systems. The results provide some indication of the contribution of associated factors with consumer choices, as well as exploring consumer values for higher food safety standards. The results are of relevance to the current policy debate regarding the introduction of genetically modified foods to Australia.

The contingent valuation method experiment provides an estimate of the consumer welfare obtained from the opportunity to delay a decision to introduce new genetically modified organisms into Australian farming systems. Such a moratorium would provide an opportunity for researchers to collect information regarding the long-term risks associated with the commercial release of new biotechnologies. The results are of relevance to government policy makers debating whether or not the benefits of a precautionary approach to the release of genetically modified organisms outweighs the opportunity costs of foregone development opportunities.