The informational and signaling impacts of labels: experimental evidence from India on GM foods

Abstract

AbstractMuch of the debate between the European and US positions about the labeling of genetically modified (GM) foods has been whether consumers perceive labels as a source of information or as a signal to change behavior. In this paper we provide an experimental framework for examining these roles of information and signaling. While previous studies have focused on the impact of labels on consumer behavior, our interest is also in what happens prior to the expression of aversion to GM-labeled foods. In particular, the experiment design allows the researcher to estimate a lower bound of the informational impact of labels on GM food aversion. The other novel feature of this paper is that, unlike earlier studies, it uses subjects from a developing country.