Biotech Foods Labeling, Consumers' Behavior And Market Share

The rapid development of biotechnology has greatly influenced industries such as agriculture, medicine, chemistry, environmental protection and so on during the last ten years. Along with this, the international controversy on the safety of biotech foods is becoming intenser. The controversy on biotech foods induced a set of debate in other fields, such as international trade, property rights issues and regulatory laws due to the huge economic interests with regard to biotechnology application. It is known to us that consumers' attitudes are the decisive factors, for their preferences and decisions are the key to the success of the commercialization of biotech foods.The mandatory labeling regulation is expected to have a significant impact on consumption of biotech products, which in turn would affect their market share. However, the degree of the impact is largely determined by consumers' acceptance of biotech products and consumers' attitude and behavior influenced by labeling. The main purposes of this thesis are to investigate the implementation of the mandatory food labeling policy and its impact on the market share of biotech edible oil. Besides, we analyzed the influences of urban residents' characteristics on their biotech oil purchasing decisions. After that, we drew a comparision between the results of two datasets, one from supermarkets and the other from a household survey, to know better about the market trend of biotech oil and its influencing factors.We first collected scanning sales data from supermarkets POS Machine before and after the enforcement of labeling policy. After dealing with thousands of actural sales records, we adapted the pooled cross-section data model to examine factors including labeling that influence Chinese consumers' behavior and the overall market share of biotech oils. It is found that the market share of biotech oils decreased roughly 4 percent as a result, though small in absolute terms but statistically significant. Besides that, in the long run, biotech oil would keep on a dominative market share, though small and statistically insignificant in its growing trend. Then we acquired data from a 1000-sample urban houshold survey containing consumers' characteristics and their purchasing preferences before and after the labeling regulation, which was conducted by our cooperation with the Bureau of Urban Survey in Jiangsu Province. Based on the above results using supermarket actual sales data, we tested the influences of consumers' characteristics on their purchasing decisions using the Logit model. Then, we analyzed how changes of biotech oil market share are formed by distinct consumers' behaviors. It is found that consumers' purchasing decisions are influenced by buyers' characteristics, risk consciousness, socioeconomic factors of families and so on. Besides, the changes of biotech oil market share are affected by the structural effect of the rich, while there is no apparent gross consumption effect of the poor, which could be underestimated by a series of factors.Factors such as price, income and information play a crucial role in determining Chinese consumers' biotech foods purchasing. The enforcement of Labeling that served as a source for biotech information did decrease the market share of biotech oil in the short run, but in a much longer period, price will still be of main concern restricted by Chinese consumers average income level. Consumers of lower income will gain more from price decrease. With the accelerated moving of rural residents to urban areas, the increasing income of poorer urban residents and the expansion of supermarket, the demand for biotech foods will keep on going up. However, consumers' acceptance and willingness to pay will decline regularly with their improvement of perception and income, as Chinese consumers currently know little about biotech foods.This means that biotech foods would only achieve success through the advance in biotechnology with more price and health benefits than their ordinary counterparts.However, this is only our preliminary research. To learn more about the enforcement of biotech food labeling policy, consumers' purchasing behavior, and the correspondent market share trend, we will have to expand our research scope and deal better with problems concerning the statistic of edible oil consumption.