Sara Scatasta

Irreversibility, Uncertainty, and the Adoption of Transgenic Crops: Experiences from Applications to HT Sugar Beets, HT Corn, and Bt Corn

This study applies a real option approach to quantify, ex-ante, the maximum incremental social tolerable irreversible costs (MISTIC) that would justify immediate adoption of HT and Bt corn in the European Union (EU). The results are compared with previous ones for HT sugar beets. In total, according to our analysis, the BU gives up about €309 million on average per year due to the quasi moratorium on transgenic crops for Bt corn, HT corn, and HT sugar beets alone. On the other hand, the MISTIC per household and year for Bt corn, HT corn, and HT sugar beets is €0.27, €0.46, and €1.10, respectively, or €1.83 for all three crops. The low MISTIC provides a strong economic argument for prohibiting the immediate introduction of the three transgenic crops. The validity of the argument will largely depend on consumer attitudes towards transgenic crops.

The Environmental Benefits and Costs of Genetically Modified (GM) Crops

The widespread introduction of genetically modified (GM) crops may change the effect of agriculture on the environment. The magnitude and direction of expected effects are still being hotly debated, and the interests served in this discussion arena are often far from those of science and social welfare maximization. This chapter proposes that GM crops have net positive environmental effects, while regulatory responses focus mainly on environmental concerns, giving an unbalanced picture of the regulatory context. This unbalance supports the hypothesis that environmental concerns about GM crops have been politically instrumentalized and that more attention should be paid to regulatory responses considering the environmental benefits of this technology. It is also argued that a number of environmental effects have not yet been quantified and more research is needed in this direction.

Does Mandatory Labeling of Genetically Modified Food Grant Consumers the Right to Know? Evidence from an Economic Experiment

Opponents of the voluntary labeling scheme for genetically modified (GM) food products often argue that consumers have the ?right to know? and therefore advocate mandatory labeling. In this paper we argue against this line of reasoning. Using experimental auctions conducted with a sample of the resident population of Mannheim, Germany, we show that the quality of the informational signal generated by a mandatory labeling scheme is affected by the number of labels in the market. If there are two labels, one for GM products and one for non-GM products, mandatory and voluntary labeling schemes generate a similar degree of uncertainty about the quality of products that do not carry a label.