Information values on the consumer's valuation of non-GM material: The case of cooking oil in Korea

This paper analyzes the changes in consumer preference that may occur when the current Genetically Modified (GM) crops policy is strengthened by applying mandatory labeling to all processed food that uses GM crops as raw materials. We estimate the change in consumers' willingness to pays for cooking oil before and after providing the information on GM raw material contained in the currently marketed cooking oil to consumers. To this end, a hypothetical cooking oil product using non-GM raw materials is set up, and consumers are classified into high and low awareness groups for genetically modified organisms (GMOs) and those who prefer and do not prefer organic foods. The Contingent Valuation Method (CVM) analyses show the amount of willingness to pay before providing the information for high and low awareness groups for GMOs increases from 23.8 dollars and 18.0 dollars per 1.8 L to 25.6 dollars and 20.3 dollars, respectively. The value of the information on GM raw materials of a consumer group with high prior knowledge of GMOs is estimated to be 1.8 dollars, and the value of the information of a consumer group with low prior knowledge is estimated to be 2.4 dollars per 1.8 L. The willingness to pay (WTP) change according to the information provision of the group with the highest prior knowledge of GMOs is estimated to be 0.6 dollars, and the WTP change is estimated to be 3.6 dollars for the group with lowest prior knowledge. This implies that the lower the prior knowledge possessed by a consumer, the higher the value of information on GM raw materials elicited.