Investigating the Effect of Nudges on Consumers’ Willingness to Pay for Genetically Modified Corn Oil

Abstract

Shifting from conventional methods of food production to genetic modification methods benefits sustainable agri-food production and environmental preservation. However, one of the main problems genetically modified food manufacturers have ever had to deal with is the public acceptability of GM foods. This study has two major objectives. First, it intends to apply principles from behavioral economics to investigate how consumers’ willingness to pay for GM corn oil can be affected. For this purpose, two different nudges are tested by providing consumers with positive information regarding GMO and changing the wording of the GMO label. Then, a comparison between the effectiveness of each of them is provided. Second, it investigates the impact of trust in GM food institutions, GMO information, and perceived GMO risk on both WTP for GM edible oil and the effectiveness of each nudge. A between-subjects choice experiment with a sample size of 550 Iranian corn oil consumers was conducted in Mashhad from March to April 2021. The results of mixed logit models indicate that both nudges affected consumer valuation of GM corn oil significantly, while their effectiveness differed according to the consumer level of trust in the GM food institutions and the perceived risk of GMO. Increasing consumer trust and information raises the WTP for GM corn oil; however, perceived risk has no effect. This study introduces effortless tools that GM food manufacturers can consider in their marketing strategies to affect consumers in the desired way.