Scientific Impact - Probit regression: Potatoes

Scientific Impact
Genetic modification is a technique that has been used to produce food products that are approved by the Food and Drug Administration (FDA). Genetic engineering has brought new opportunities to farmers for pest control and in the future will provide consumers with nutrient enhanced foods. GM plants and animals have the potential to be the single greatest discovery in the history of agriculture. We have just seen the tip of the iceberg of future potential.
Human Impact
The health benefits from genetic modification can be enormous. A special type of rice called “golden rice” has already been created which has higher levels of vitamin A. This could be very helpful because the disease Vitamin A Deficiency (VAD) is devastating in third-world countries. VAD causes irreversible blindness in over 500,000 children, and is also responsible for over one million deaths annually. Since rice is the staple food in the diets of millions of people in the third world, Golden Rice has the potential of improving millions of lives a year by reducing the cases of VAD.
The FDA has approved GM food for human consumption, and Americans have been consuming GM foods for years. While every food product may pose risks, there has never been a documented case of a person getting sick from GM food.
Financial Impact
Genetically modified plants have reduced the cost of food production, which means lower food prices, and that can help feed the world. In America, lower food prices help decrease the number of hungry people and also lets consumers save a little more money on food. Worldwide the number of hungry people has been declining, but increased crop production using GM technology can also help further reduce world hunger.
Environmental Impact
GM technology has produced new methods of insect control that reduce chemical insecticide application by 50 percent or more. This means less environmental damage. GM weed control is providing new methods to control weeds, which are a special problem in no-till farming. Genetic modification of plants has the potential to be one of the most environmentally helpful discoveries ever.
Figure 5: Information given to participants, independent, verifiable information
The following is a statement on genetic modification approved by a third-party group, consisting of a variety of individuals knowledgeable about genetically modified foods, including scientists, professionals, religious leaders, and academics. These parties have no financial stake in genetically modified foods.
General Information
Bioengineering is a type of genetic modification where genes are transferred across plants or animals, a process that would not otherwise occur (In common usage, genetic modification means bioengineering). With bioengineered pest resistance in plants, the process is somewhat similar to the process of how a flu shot works in the human body. Flu shots work by injecting a virus into the body to help make a human body more resistant to the flu. Bioengineered plant-pest resistance causes a plant to enhance its own pest resistance.
Scientific Impact
The Food and Drug Administration standards for GM food products (chips, cereals, potatoes, etc.) is based on the principle that they have essentially the same ingredients, although they have been modified slightly from the original plant materials.
Oils made from bioengineered oil crops have been refined, and this process removed essentially all the GM proteins, making them like non-GM oils. So even if GM crops were deemed to be harmful for human consumption, it is doubtful that vegetable oils would cause harm.
Human Impact
While many genetically modified foods are in the process of being put on your grocers’ shelf, there are currently no foods available in the U.S. where genetic modification has increased nutrient content.
All foods present a small risk of an allergic reaction to some people. No FDA approved GM food poses any known unique human health risks.
Financial Impact
Genetically modified seeds and other organisms are produced by businesses that seek profits. For farmers to switch to GM crops, they must see benefits from the switch. However, genetic modification technology may lead to changes in the organization of the agri-business industry and farming. The introduction of GM foods has the potential to decrease the prices to consumers for groceries.
Environmental Impact
The effects of genetic modification on the environment are largely unknown. Bioengineered insect resistance has reduced farmers’ applications of environmentally hazardous insecticides. More studies are occurring to help assess the impact of bioengineered plants and organisms on the environment. A couple of studies reported harm to Monarch butterflies from GM crops, but other scientists were not able to recreate the results. The possibility of insects growing resistant to GM crops is a legitimate concern.
Table 1. Characteristics of the Auction Participants
Variable
|
Definition
|
Mean
|
St. Dev
|
Gender
|
1 if female
|
0.62
|
0.49
|
Age
|
The participant’s age
|
49.5
|
17.5
|
Married
|
1 if the individual is married
|
0.67
|
0.47
|
Education
|
Years of schooling
|
14.54
|
2.25
|
Household
|
Number of people in participant’s household
|
2.78
|
1.65
|
Income
|
The households income level (in thousands)
|
57.0
|
32.6
|
White
|
1 if participant is white
|
0.90
|
0.30
|
Read_L*
|
1 if never reads labels before a new food purchase
|
0.01
|
0.11
|
|
1 if rarely reads labels before a new food purchase
|
0.11
|
0.31
|
|
1 if sometimes reads labels before a new food purchase
|
0.31
|
0.46
|
|
1 if often reads labels before a new food purchase
|
0.37
|
0.48
|
|
1 if always reads labels before a new food purchase
|
0.20
|
0.40
|
Informed*
|
1 if an individual considered themselves at least somewhat informed regarding genetically modified foods
|
0.42
|
0.49
|
Labels1
|
1 if the treatment bid on foods with GM labels in round 1
|
0.52
|
0.50
|
__________________________________________________________________________________________
*Information about participant’s prior beliefs; information collected from participants in pre-auction questionnaire. Table 2. Mean bids for participants, excludes double-zero bids
Mean bids – all participants
|
n
|
mean bid
|
std. dev.
|
Median
|
Minimum
|
Maximum
|
GM OIL
|
146
|
1.07
|
0.81
|
0.99
|
0
|
3.99
|
OIL
|
146
|
1.24
|
0.78
|
1.00
|
0
|
3.79
|
GM CHIPS
|
155
|
1.03
|
0.85
|
0.99
|
0
|
3.99
|
CHIPS
|
155
|
1.20
|
0.81
|
1.00
|
0.05
|
4.99
|
GM POTATOES
|
159
|
0.84
|
0.66
|
0.75
|
0
|
3
|
POTATOES
|
159
|
0.98
|
0.65
|
0.89
|
0
|
3.89
|
-
Mean bids when participants only received positive information.
|
n
|
mean bid
|
std dev
|
Median
|
Minimum
|
Maximum
|
GM OIL
|
26
|
1.56
|
0.73
|
1.50
|
0
|
2.99
|
OIL
|
26
|
1.54
|
0.79
|
1.55
|
0
|
3.50
|
GM CHIPS
|
30
|
1.31
|
0.72
|
1.13
|
0
|
2.99
|
CHIPS
|
30
|
1.36
|
0.72
|
1.18
|
0.05
|
2.99
|
GM POTATOES
|
27
|
1.30
|
0.71
|
1.25
|
0
|
2.50
|
POTATOES
|
27
|
1.26
|
0.67
|
1.25
|
0
|
2.00
|
-
Mean bids when participants only received negative information.
|
n
|
mean bid
|
std dev
|
Median
|
Minimum
|
Maximum
|
GM OIL
|
26
|
0.79
|
0.82
|
0.50
|
0
|
3.25
|
OIL
|
26
|
1.22
|
0.65
|
1.00
|
0.25
|
2.49
|
GM CHIPS
|
29
|
0.81
|
0.94
|
0.50
|
0
|
3.99
|
CHIPS
|
29
|
1.25
|
1.02
|
1.00
|
0.05
|
4.99
|
GM POTATOES
|
29
|
0.61
|
0.68
|
0.50
|
0
|
2.75
|
POTATOES
|
29
|
0.98
|
0.88
|
0.75
|
0.05
|
3.89
|
-
Mean bids when participants received both positive and negative information.
|
n
|
mean bid
|
std dev
|
Median
|
Minimum
|
Maximum
|
GM OIL
|
24
|
0.68
|
0.55
|
0.50
|
0
|
1.79
|
OIL
|
24
|
0.90
|
0.72
|
0.85
|
0
|
3.00
|
GM CHIPS
|
23
|
0.68
|
0.74
|
0.35
|
0
|
2.25
|
CHIPS
|
23
|
0.81
|
0.79
|
0.49
|
0.05
|
2.75
|
GM POTATOES
|
26
|
0.50
|
0.39
|
0.50
|
0
|
1.50
|
POTATOES
|
26
|
0.70
|
0.43
|
0.50
|
0.05
|
1.60
|
-
Mean bids when participants received both positive and third-party information.
|
n
|
mean bid
|
std dev
|
Median
|
Minimum
|
Maximum
|
GM OIL
|
26
|
1.12
|
0.62
|
1.00
|
0
|
2.39
|
OIL
|
26
|
1.14
|
0.57
|
1.00
|
0.10
|
2.39
|
GM CHIPS
|
25
|
1.24
|
0.77
|
1.19
|
0
|
2.79
|
CHIPS
|
25
|
1.33
|
0.73
|
1.16
|
0.20
|
2.89
|
GM POTATOES
|
26
|
0.92
|
0.45
|
0.99
|
0
|
1.85
|
POTATOES
|
26
|
0.93
|
0.39
|
0.99
|
0.25
|
1.90
|
-
Mean bids when participants received both negative and third-party information.
|
n
|
mean bid
|
std dev
|
Median
|
Minimum
|
Maximum
|
GM OIL
|
21
|
1.33
|
1.05
|
1.25
|
0
|
3.99
|
OIL
|
21
|
1.60
|
0.97
|
1.50
|
0.49
|
3.79
|
GM CHIPS
|
25
|
1.12
|
0.97
|
0.99
|
0
|
3.50
|
CHIPS
|
25
|
1.38
|
0.77
|
1.01
|
0.49
|
3.00
|
GM POTATOES
|
27
|
0.89
|
0.77
|
0.89
|
0
|
3.00
|
POTATOES
|
27
|
1.14
|
0.67
|
0.99
|
0.50
|
3.00
|
-
Mean bids when participants received positive, negative and third party information.
|
n
|
mean bid
|
std dev
|
Median
|
Minimum
|
Maximum
|
GM OIL
|
23
|
0.94
|
0.77
|
0.95
|
0
|
2.75
|
OIL
|
23
|
1.06
|
0.82
|
1.00
|
0.05
|
3.29
|
GM CHIPS
|
23
|
0.95
|
0.81
|
0.85
|
0
|
3.25
|
CHIPS
|
23
|
0.95
|
0.66
|
0.99
|
0.1
|
2.89
|
GM POTATOES
|
24
|
0.82
|
0.61
|
1.00
|
0
|
1.99
|
POTATOES
|
24
|
0.84
|
0.55
|
0.84
|
0.01
|
2.00
|
Table 3: Percentage of consumers who bid zero for a GM-labeled food item. (When a consumer bids zero for both GM and non-GM version of a commodity their bids are not included)
| Observations | Out of market | | All goods | 165 | 17 | 10.3% | Vegetable Oil, only | 146 | 13 | 8.9% | Tortilla Chips, only | 155 | 20 | 12.9% | Potatoes, only | 159 | 20 | 12.6% |
Table 4: Percentage of consumers who’s bid for the GM-labeled food is 2/3’s the amount they bid for the plain labeled food, or lower. (When a consumer bids zero for both GM and non-GM version of a commodity their bids are not included)
| Observations | Out of market | Percent out of market | All goods | 165 | 27 | 16.4% | Vegetable Oil, only | 146 | 28 | 19.2% | Tortilla Chips, only | 155 | 37 | 23.9% | Potatoes, only | 159 | 35 | 22.0% |
|