Signaling impacts of GMO labeling on fruit and vegetable demand

Food labels may have both informational and signaling influences on consumer demand. We conduct a choice experiment with over 1,300 subjects to examine the signaling effect of the food product labels on consumer demand for other competing products in the market. Specifically, we focus on the genetically modified (GM) text labeling for fresh produce (strawberries, apples, and potatoes) in the United States. Contrary to some previous studies, our results indicate that the absence-claim label (Not-GM) does not have a negative impact on the demand for related conventional products. Instead, we find that consumer demand for unlabeled products is significantly enhanced with the introduction of presence-claimed GM labels. Our results contribute to the ongoing discussion of the enactment of mandatory labeling for GM foods by the federal U.S. government. Our results suggest that, in the case of direct text disclosure labels, consumers may no longer differentiate between unlabeled products and Not-GM-labeled products after the mandatory GM labeling law is in effect.