GMO and Non-GMO Labeling Effects: Evidence from a Quasi-Natural Experiment.

This paper leverages a quasi-natural experiment in Vermont to analyze the effects of mandatory GMO labeling on consumer demand. The United States recently mandated disclosure labels on all foods that contain genetically modified organisms (GMOs), despite longstanding, widespread use of voluntary third-party non-GMO labeling. We leverage the earlier passage and implementation of a mandatory GMO labeling law in Vermont as a quasi-natural experiment to show that adding this mandatory labeling into a market with pre-existing voluntary non-GMO labels had no effect on demand. Instead, the legislative process made consumers aware of GMO topics and increased non-GMO product sales before the GMO labeling mandate went into effect. The GMO-related legislative processes also increased non-GMO product demand in other states that considered, but did not implement, GMO labeling mandates. We find that 36% of new non-GMO product adoption can be explained by differences in consumer awareness tied to legislative activity. Our findings suggest that voluntary non-GMO labels may have provided an efficient disclosure mechanism without mandatory GMO labels. History: Avi Goldfarb served as the senior editor and Anja Lambrecht served as associate editor for this article. Funding: This research was funded in part by the Cornell University Business of Food Small Grants Program. Supplemental Material: The online appendices and data are available at https://doi.org/10.1287/mksc.2022.1375. [ABSTRACT FROM AUTHOR]