Date of Graduation

12-2014

Document Type

Thesis

Degree Name

Master of Science in Agricultural Economics (MS)

Degree Level

Graduate

Department

Agricultural Economics and Agribusiness

Advisor/Mentor

Eric J. Wailes

Committee Member

Rodolfo M. Nayga

Second Committee Member

Bruce L. Dixon

Keywords

Cheaptalk, Chinese Consumers' Acceptance, Contingent Valiation, Double Bounded Dichotomous Choice, GM Rice, Willingness to Pay

Abstract

Considering population growth, limitations on land and water resources, and contamination to the ecosystem due to agricultural activities, current rice production in China is facing pressure to fulfill national demand. Self-sufficiency of rice has been a long-held political objective of the Chinese government and it is national goal to maintain the equilibrium between the national production and consumption or even achieve a supply surplus in rice. With the developing bio-technology of genetic modification (GM), scientists believe that using genetically modified cultivars may ease the pressure mentioned above. However, both the government and the people are very cautious about large-scale cultivation and commercialization of GM rice and have concerns over public health, environmental safety, economic stability and other diverse impacts. The consumers' acceptance, producers' adoption of these new products, the political environment, and the cost benefit effectiveness of GM rice being commercialized has remained ambiguous within the constantly changing social media and political environment. The main objective of this thesis is to describe the political environment and perspectives of consumers to understand the barriers and controversies to accept and use GM rice by conducting research regarding consumers' attitudes and their willingness to pay (WTP) for GM rice based on different information treatments. The other purpose of this study is to compare the results of this study with previous studies of Chinese consumers' WTP and attitudes on GM rice and perform analyses based on economic, political, and social perspectives to provide contributions on future policy making.

For this study a nation-wide survey was conducted where 1150 consumer respondents were randomly recruited of which 994 provided valid data. Geographically the survey sample pool covered twenty two main rice producing/consuming provinces of mainland China. A double bounded dichotomous choice contingent valuation method was applied to estimate the consumers' WTP. To reduce the hypothetical bias, cheap talk was applied as a calibration method. Results from the survey are used to develop a welfare analysis based on an econometric model simulation, to determine under different information treatments if there are significant differences in the WTP. This research contributes to the literature and policy decision making in regards to understanding the consumer barriers to and benefits from GM rice commercialization. Our results show that consumers' WTP for GM rice is mainly negative: the total mean WTP for the entire sample was estimated to require an average 47% price discount for GM rice. This is a significant change from earlier studies (Lin, et al 2006). Science-based knowledge about GM rice benefits and risks need to be disseminated to China's consumers to improve acceptance and successful commercialization.

Key word: GM rice, China city consumers' WTP, double bounded dichotomous choice, cheap talk

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