Consumer willingness to pay for genetically modified food in Kenya

Transcription

1 AGRICULTURAL ECONOMICS Agrcultural Economcs 38 (2008) Consumer wllngness to pay for genetcally modfed food n Kenya Smon Chege Kmenju a, Hugo De Groote b, a Department of Agrcultural Economcs, Unversty of Narob, P.O. Box 29053, Narob, Kenya b Internatonal Maze and Wheat Improvement Centre (CIMMYT), P.O. Box , Vllage Market, Narob, Kenya Receved 1 May 2005; receved n revsed form 12 December 2006; accepted 3 August 2007 Abstract Genetcally modfed (GM) crops are popular n many regons of the world, but ther deployment n Afrca s hndered by safety concerns and regulatory ssues, although the contnent s n dre need of boostng ts food producton. Although consumers acceptance of GM food has been analyzed n many contnents, no such studes have been conducted n Afrca. Therefore, a survey of 604 consumers was conducted n Narob, Kenya, n 2003, to gauge consumers awareness of GM crops, ther wllngness to pay (WTP) for GM food, and the factors that nfluence ther WTP. Consumers knowledge of GM crops was lmted and only 38% of the 604 respondents were aware of GM crops. People n hgher educaton and ncome groups were more aware than others. Regardless, people were generally apprecatve of the technology, and a large majorty (68%) would be wllng to buy GM maze meal at the same prce as ther favorte brand. Consumers were, however, concerned about possble sde effects, especally on the envronment and bodversty. WTP was estmated usng a double-bounded dchotomous choce model, and the mean WTP was found to be 13.8% hgher than the average prce of non-gm maze meal. Perceptons of health rsk, and ethcal and equty concerns had a negatve nfluence on the lkelhood of purchasng GM maze meal, whereas trust n government to ensure food qualty had a postve nfluence on WTP. People wth at least some secondary educaton and those n the hgh-ncome category were more lkely to purchase GM maze meal at the same prce. The study concludes that, because awareness s stll low, approprate communcatons are needed to nvolve the consumer n the debate. Consumers acceptance n ths study was hgh, but the research needs to be expanded to rural areas, where most consumers lve, and other survey methods need to be explored. JEL classfcaton: D12, O33, Q18 Keywords: GM food; Botechnology; Double bound; Consumer; Maze; Kenya 1. Botechnology n Afrca Snce ther ntroducton n 1996, genetcally modfed (GM) crops have spread at a rate seldom seen n the dssemnaton of agrcultural technology. In 2005, GM crops were grown on 90 mllon ha, by 8.5 mllon farmers n 21 countres (James, 2006), wth more than a thrd of that area (33.9 mllon ha) n developng countres. After herbcde resstance, the most mportant trat used n GM crops s Bt nsect resstance. A gene derved from the common sol bacterum, Bacllus thurngenss (Bt), s nserted n the plants (especally cotton and maze), whch causes them to produce protens that are toxc to certan nsect pests, n partcular lepdopteran stem borer pests (FAO, 2004, p. 44). GM crops have been the subject of an ntense debate, wth crtcs questonng whether the benefts outwegh the rsks, and Correspondng author. Tel.: ; fax: E-mal address: h.degroote@cgar.org (H. De Groote). whether the poor wll beneft. The major benefts are reduced pest damage and costs of pest control. Bt crops provde very good control of lepdopteran nsect pests, so for farmers who tend to use nsectcdes, as most commercal farmers do, producton costs are reduced substantally (FAO, 2004, p. 48). Resource-poor farmers, who rarely use pestcdes, beneft from reduced crop losses, and hgher and more stable yelds (FAO, 2004, p. 43; Qam, 2003). In Kenya alone, crop losses from stem borers n maze are estmated at 13.5% or 417,000 tons annually (De Groote, Bett, et al., 2004). In South Afrca, Bt cotton has been shown to ncrease yelds and reduce costs for small holders (Thrtle et al., 2003). Reduced pestcde use s also benefcal to the envronment and to human health (McGloughln, 1999). The adopton of GM crops has been very rapd n North and South Amerca and most parts of Asa. GM crops were frst approved n the Unted States, for feed as well as food, and are now accepted by most consumers (Ganere and Chern, 2004). Between 60 and 70% of processed foods sold n U.S. c 2008 Internatonal Assocaton of Agrcultural Economsts

2 36 S. C. Kmenju, H. De Groote / Agrcultural Economcs 38 (2008) supermarket s estmated to contan genetcally engneered ngredents (Onyango et al., 2006). In Europe and Japan, however, adopton has been slow and consumer acceptance has been a major factor (Chern et al., 2002; Zhang et al., 2004). Safety and regulatory concerns stll consttute a major hurdle for developng countres (FAO, 2004), as well as the fear of losng export markets (Curts and Moeltner, 2006). Ths s a partcular problem for Afrca, wth ts hgh populaton growth and hgh levels of food nsecurty, as t stands to gan most from GM crops. In Sub-Saharan Afrca, only South Afrca s growng GM crops commercally (Echer et al., 2006), wth 0.5 mllon ha n 2005 (James, 2006). It s also the only country where a staple GM food crop s grown (Echer et al., 2006; Gouse et al., 2006). Several other countres are at dfferent stages of trals for dfferent GM crops. In Kenya, confned feld trals wth Bt maze and Bt cotton are ongong (Mugo et al., 2005). Trals wth Bt cotton are also ongong n Tanzana, Mal, and Burkna Faso. Research s beng conducted on Bt cowpeas n Zmbabwe, vrus-resstant cassava n Kenya, dsease-resstant bananas n Uganda, and GM potatoes n South Afrca. Egypt, however, has halted the commercalzaton of GM potatoes, despte years of successful research, for fear of losng ts European export market (Echer et al., 2006). Because of ts mportance, many studes of consumer acceptance have taken place n the developed countres and Asa (Curts et al., 2004). Although Afrca could beneft substantally from GM technology and GM varetes are beng produced for ths regon, smlar research on the opnons of Afrcan consumers or producers s lackng. Such studes are mportant because the successful ntroducton of GM crops nto Afrca wll depend largely on consumer acceptance (Hossan et al., 2003; Sprnger et al., 2002). The crtcal crop for East and Southern Afrca s lkely to be Bt maze. Maze s the most mportant food staple n ths regon, but producton has not kept up wth populaton growth (De Groote et al., 2005). Major constrants as perceved by farmers are lack of cash, access to technology and mproved seed, and sol fertlty, whereas the major pest problems are stem borers and storage pests (De Groote, Okuro, et al., 2004). Therefore, the Insect Resstant Maze for Afrca (IRMA) project a collaboratve effort of the Internatonal Maze and Wheat Improvement Centre (CIMMYT) and the Kenya Agrcultural Research Insttute (KARI) s developng maze varetes resstant to pest stem borers, usng both conventonal breedng and Bt technology (Mugo et al., 2005). To study the acceptance of Bt maze by consumers, a survey was carred out n Narob n 2003, explorng consumers awareness of GM crops and ther atttudes toward GM foods n general. Wllngness to pay (WTP) was estmated through the contngent valuaton (CV) method, and the factors that nfluence consumers acceptance and mean WTP were analyzed. Ths artcle reports the results of that study. To our knowledge, ths s the frst study of consumers atttudes and acceptance of a major GM crop n Sub-Saharan Afrca, and the frst study to use CV and the double-bound method n the regon. 2. Consumer acceptance of GM food Consumer acceptance of GM foods dffers substantally around the world. In the Unted States, consumers generally accept GM products (Ganere and Chern, 2004), and the premums they are wllng to pay for non-gm products are small (Chen and Chern, 2002). A study comparng U.S. and Chnese consumers found ther atttudes generally supportve of the new technology (Zhang et al., 2004). European consumers, on the other hand, have strong reservatons about GM crops. In the Unted Kngdom, only few consumers would accept to eat GM food, even wth a dscount (Moon et al., 2004). U.K. consumers would pay much hgher premums for non-gm food than ther U.S. counterparts (Moon and Balasubramanan, 2001). On average, 73% of consumers n 15 European countres rejected GM food, rangng from 58% n the Unted Kngdom to 85% n Greece (Sprnger et al., 2002). Swedsh consumers, n partcular, dslked GM food, and would even pay a premum to ban GM feed for ther lvestock (Carlsson et al., 2004). In Asa, Japan and Korea stand out as countres wth low consumer acceptance for GM food, compared wth Chna and Tawan (Km and Km, 2004). Consumers n Bejng were wllng to pay more for GM food (38% for rce and 16% for GM soybean) than for the conventonal counterpart (L et al., 2002). In Korea, large numbers of consumers are wllng to buy GM products when offered at a dscount (Km and Km, 2004). Compared wth developed natons and Asa, however, few studes have addressed consumer acceptance of GM crops n developng countres, especally n Afrca. Several factors have been found that nfluence consumer acceptance of GM food. In the Unted States, consumers perceptons and atttudes toward GM food were found to nfluence ther WTP (Kaneko and Chern, 2003), and the percepton that GM food offers partcular benefts such as a prce dscount, health attrbutes, or envronmental benefts had a postve effect (Ganere and Chern, 2004). Income and presence of chldren n the household, on the other hand, had a negatve effect on U.S. respondents acceptance of GM food products, and female respondents and mddle-aged consumers were found to be wllng to pay a hgher premum for non-gm food products (Chen and Chern, 2002). In Europe, negatve perceptons of GM food were found to decrease WTP, both n the Unted Kngdom (Moon and Balasubramanan, 2004) and Belgum (Verdurme and Vaene, 2003). Cogntve factors emerged as the most mportant factors to explan the dfferences n WTP between EU countres (Sprnger et al., 2002), wth rsk percepton havng a negatve effect on WTP, and belefs, knowledge, and trust n government havng a postve effect. In Chna, consumers postve opnons toward GM rce and soybean ol ncrease ther WTP, and hgher knowledge levels ncreased the WTP for GM soybean ol (L et al., 2002). In

3 S. C. Kmenju, H. De Groote / Agrcultural Economcs 38 (2008) Japan, concern about food safety and knowledge about botechnology decrease WTP for GM food (McCluskey et al., 2003). Consumer acceptance was much hgher n countres wth lowrsk perceptons such as Chna, than n countres wth hgh-rsk perceptons such as Romana (Curts and Moeltner, 2006). Consumers n developng natons (Chna and Colomba) were found to have more postve atttudes than those n developed countres (UK and US; Curts et al., 2004). It can be argued that food securty problems are more urgent n developng countres, whereas perceved levels of rsk may be smaller because of a hgher trust n government, more postve perceptons of scence, and more postve meda nfluences. Smlarly, per capta food producton struggles to keep pace wth populaton growth n Sub-Saharan Afrca, and serous food shortages are a regular occurrence, so arguments n favor of GM crops are stronger (De Groote, Mugo, et al., 2004; Pnstrup-Andersen and Scholer, 2002). The fear of losng export markets, on the other hand, s a negatve factor for many developng countres, and was the major reason why Romana stopped the commercalzaton of GM crops (Curts and Moeltner, 2006) and Egypt the development of GM potatoes (Echer et al., 2006). However, the rsk of losng export markets for Kenyan maze can be consdered small. The country rarely produces enough maze for export (the last tme was n 1996), as the country struggles to meet food self-suffcency and had to mport on average 335,000 tons annually over the last 10 years (FAO Statstcs Dvson, 2007). About 50% of the Kenyan populaton lacks access to adequate food, and the government has been spendng roughly US$40 65 mllon annually on food relef (Republc of Kenya, 2004). 3. Methodology Based on ths lterature revew, and gven a lmted budget, sutable stes were selected, a sample survey desgned wth sutable tools, and an approprate conceptual and analytcal framework developed Ste selecton and data collecton Consumers access to nformaton and knowledge of GM food are lkely to be hgher n urban areas, and surveys n these areas are cheaper and easer to organze. Therefore, Narob was selected for the frst consumer survey on GM food. Intervews were conducted n November and December 2003 at three types of outlets: supermarkets, kosks (small roadsde shops), and posho mlls (small hammer mlls). Supermarkets provde a wde varety of fnshed maze products at central locatons, caterng to hgher-ncome groups. Kosks also provde fnshed products, but n a much smaller assortment, and are located n resdental areas. Posho mlls, mechancal hammer mlls, are typcally found n neghborhoods wth hgh concentratons of low-ncome households. Ther clents brng maze gran from the market and have t ground to flour, resultng n a less refned but much cheaper meal. From a lst of supermarkets obtaned from Kenya s Central Bureau of Statstcs, 15 supermarkets were randomly selected: 10 large ones (wth more than three local branches), and 5 small ones. For the kosks, seven estates (admnstratve subdvsons of Narob) were selected from a lst of cty estates, and three kosks randomly selected per estate. Twenty-one posho mlls were randomly selected from the 16 estates known to house them, and the number selected n each was proportonal to the total number n the estate. In total, 604 consumers were ntervewed: 183 at supermarkets, 210 at kosks, and 211 at posho mlls. Fve enumerators were hred and traned specfcally for ths survey. In the selected outlets, they approached every thrd consumer lookng for maze products and asked for an ntervew. Intervewng consumers was more dffcult n the supermarkets where shoppers were usually n a hurry and about one out of every four shoppers approached refused to cooperate, mostly ctng lack of tme. Another 27 shoppers left wthout completng the ntervew as they thought t was takng too long, reducng the number of ntervews to 183 for ths type of outlet. Consumers n the other outlets, however, had more tme, and only a few consumers n the kosks refused to be ntervewed, and none n the posho mlls. Frst, the consumers awareness of GM crops was assessed by checkng whether they had read or heard about botechnology and GM crops n general, and about Bt maze, Bt cotton, and vrus-resstant sweet potato n partcular. Respondents aware of GM crops were then admnstered the entre questonnare, whereas those unaware were frst presented wth a short explanaton of the scentfc background of GM crops, ther advantages and dsadvantages, and the countres currently growng them (see Appendx). In order to control for possble order effects, two formats of the questonnare were developed. Half of them presented the short explanaton wth benefts of GM crops frst, whereas the other half presented rsks frst. After the presentaton, those prevously unaware were also admnstered the questonnare. Ths questonnare ncluded questons about consumers sources of nformaton on GM crops, ther atttudes toward GM food, ther demographc characterstcs, and ther WTP for GM food. Rsk perceptons of consumers were gauged by askng respondents f they agreed or dsagreed wth 16 statements on the rsks and benefts assocated wth GM crops, and how strongly. There were four statements on beneft percepton, three each for envronmental rsk and health rsk perceptons, and sx for equty and ethcal concerns. The reples were transformed nto a score (from 1 for totally dsagree, 0.5 for dsagree, 0 for neutral, 0.5 for agree, and 1 for totally agree ). The scores were then averaged to form a percepton ndex for each category: beneft perceptons (I BP ), health rsk perceptons (I HRP ), envronmental rsk perceptons (I ERP ), and ethcal and equty concerns (I EEC ). Age was expressed n years, and gender transformed nto a dummy varable (1 for female, 0 for male).

4 38 S. C. Kmenju, H. De Groote / Agrcultural Economcs 38 (2008) Table 1 Consumers characterstcs Varable Category % Hghest level of educaton None 1 Some prmary 20 Some secondary 40 Some tertary college 27 Some unversty 12 Employment status Formally employed 41 Self-employed 29 Unemployed 19 Student 11 Income level per month (KShs) None (student) 10 None (non-student) 18 Low (1 15,000 KShs/month) 48 Mddle (15,001 50,000 KShs/month) 22 Hgh (>50,000 KShs/month) 2 Respondents awareness about In general 38 GM crops Bt maze 54 Bt cotton 21 Vrus-resstant sweet potato 65 Respondents were classfed nto four educaton categores, accordng to the hghest educaton level attaned: no schoolng or some prmary (combned, because only sx respondents dd not attend any school); at least some secondary educaton, at least some tertary college; and at least some unversty educaton, wth a bnary varable for each category. Fnally, respondents were classfed nto fve ncome categores: people wthout ncome (excludng students), students wthout ncome (because ther behavor often reflects that of hgher-ncome groups), people wth a low ncome of up to 15,000 Kenyan shllng (KShs) per month, mddle ncome (between KShs 15,001 and KShs 50,000), and hgh ncome (more than KShs 50,000/month) (US$1 = KShs 75 at the tme of the survey). Of the 604 respondents, 52 had some mssng values, so 553 remaned for the regresson analyss. Ths s the frst study of ts knd to use maze meal outlets, stratfed by type, as the frst stage n the samplng desgn. Ths desgn avods the expense of constructng a samplng frame, typcal for the common, urban household surveys wth cty blocks or estates as the frst stage. Another novelty s the use of ndces to quantfy consumer atttudes, allowng the estmaton of margnal effects on WTP Consumer characterstcs, awareness, and atttudes Overall, there were slghtly more men (55%) than women n the sample. Most respondents had attended school, and had ether some prmary educaton (20%), some secondary educaton (40%), or hgher (39%) (Table 1). Most respondents worked, ether n formal employment (41%) or self-employment (29%). Almost half (48%) had an ncome below KShs 15,000, and a large group (28%) had no ncome. Most of the consumers (72%) lved n households together wth chldren under 18. The socoeconomc characterstcs of maze consumers surveyed n ths study dffered substantally between the dfferent types of outlets. Supermarkets, n partcular, had more clents wth formal employment, unversty educaton, and hgher ncome. Ths had an effect on consumers awareness and atttudes, whch has been analyzed elsewhere (Kmenju et al., 2005). Average sample statstcs, however, compare well wth the cty s populaton characterstcs derved from the 1999 census. The census found 56% of Narob resdents older than 14 years to be male, wth few people havng no educaton, a large group (52%) wth at least some secondary educaton, and a large group who worked for pay (37%; Central Bureau of Statstcs, 2001). Almost half of the respondents (46%) had heard or read somethng about botechnology, and slghtly less (38%) about GM crops (Table 1). Of those respondents who were aware of GM crops, 95% were aware of the term gene ; 65% had heard of vrus-resstant sweet potato; 54% knew about Bt maze; and 21% about Bt cotton. These numbers lkely reflect the order of ntroducton of the dfferent GM crops n Kenya. Vrusresstant sweet potatoes were ntroduced n 2000, Bt maze n 2001, and Bt cotton n Trust n the government was hgh: most respondents (76%) thought that there were suffcent government controls to ensure food qualty. There were large dfferences n awareness between the socoeconomc groups. It ncreased strongly wth educaton, from 17% n those wth no formal educaton to 90% for those wth some unversty educaton. Awareness ncreased strongly wth ncome, from 28% for those wth no ncome (excludng students) to 92% for those wth monthly ncomes of over KShs 50,000 per month (around US$667). Men were more aware (45%) than women (29%). Most of the respondents agreed (73%) or strongly agreed (9%) that GM crops can ncrease productvty (Table 2). The average score for the percepton of ncreased productvty was calculated at 0.38 (from 1 for strongly dsagree to 1 for strongly agree ). Smlarly, most respondents agreed that GM crops could reduce pestcdes on food (average score 0.37) and n the envronment (0.32) and mprove the nutrtonal qualty (0.36). Averagng the score for the four questons on potental benefts provded a percepton ndex I BP, wth an average of Respondents aware of GM crops had slghtly lower beneft perceptons, reflected n hgher scores, than the others. Many respondents, however, had concerns about envronmental rsks. More than half of the consumers agreed that GM crops could cause death of nontarget nsects (score = 0.11), and can lead to the loss of land races (score = 0.07). However, more than half of the respondents dsagreed wth the general statement that GM threatens the envronment (a negatve score of 0.09). Averagng the three scores led to a slghtly postve ndex of envronmental rsk percepton (I ERP= 0.03). Consumers aware of GM crops had slghtly hgher envronment rsk perceptons (I ERP = 0.07) than the others (I ERP = 0.01). Respondents opnon about the effect of GM food on human health was mxed. Asked f GM foods would cause allergc reacton, about equal numbers dsagreed (39%) as agreed (40%). Slghtly more people dsagreed wth the statement that GM

5 S. C. Kmenju, H. De Groote / Agrcultural Economcs 38 (2008) Table 2 Consumers atttudes and percepton of GM technology Percentage of respondents Mean score Perceptons of Statement Strongly dsagree (score = 1) Dsagree (score = 0.5) Neutral (score = 0) Agree (score = 0.5) Strongly agree (score = 1) Consumers aware Consumers not aware Overall Benefts Envronmental rsks Health rsks GM technology ncreases productvty and offers soluton to world food problem GM can reduce pestcdes on food GM can create foods wth enhanced nutrtonal value GM has the potental of reducng pestcde resdues n the envronment Beneft perceptons ndex (I BP ) Insect-resstant GM crops may cause death of untargeted nsects GM can lead to a loss of orgnal plant varetes GM threatens the envronment Envronmental rsk percepton ndex (I ERP ) People could suffer allergc reacton after consumng GM foods Consumng GM foods can damage one s health Consumng GM foods mght lead to an ncrease n antbotc-resstant dseases Health rsk percepton ndex (I HRP ) Ethcal and GM s tamperng wth nature equty GM food s artfcal concerns GM technology makers are playng god GM products are beng forced on developng countres by developed countres GM products only beneft multnatonals makng them GM products do not beneft small-scale farmers Ethcal and equty concerns ndex (I EEC ) food can damage one s health (48%) than agreed (37%). Smlarly, more people dsagreed wth the statement that GM foods could lead to an ncrease n antbotc-resstant dseases (43% vs. 35%), leadng to a slghtly negatve ndex of health rsk percepton (I HRP = 0.02; Table 2). About half of the consumers agreed that genetc modfcaton s tamperng wth nature and that GM food s artfcal. Otherwse, more people dsagreed wth the ethcal and equty concerns, n partcular that GM technology developers are playng God (72%), and that GM products are beng forced upon

6 40 S. C. Kmenju, H. De Groote / Agrcultural Economcs 38 (2008) developng countres (54%), that they only beneft the multnatonals (64%) and not the small-scale farmer (71%). Ths led to a slghtly negatve percepton score (I EEC = 0.10), wth the group aware of GM crops havng a slghtly hgher ndex of ethcal and equty concerns (I EEC = 0.08) than the others (I EEC = 0.12; Table 2) Conceptual framework CV s a survey-based method of elctng how consumers evaluate goods and servces not found n the market place. These surveys only gve meanngful results f they are properly grounded n a consumer maxmzaton framework (Hanemann and Kannnen, 1998). It s generally assumed that consumers maxmze ther utlty subject to a budget constrant and wll, therefore, choose the opton that gves them the hghest utlty. In ths context, WTP s the maxmum amount of money a consumer would be wllng to pay for the new product. Dfferent people have dfferent WTP for a partcular good, and t s the dstrbuton of ths WTP among the target populaton that offers nterestng market nformaton. Ths dstrbuton can be estmated through open-ended or close-ended questons. Openended questons provde drect estmates and are easy to analyze, but people often fnd t dffcult to state ther WTP for a new product (Hanemann and Kannnen, 1998). Close-ended questons are closer to real-lfe stuatons and have, therefore, become the method of choce (Arrow et al., 1993). In ths method, WTP s not drectly observed, but assumptons about ts dstrbuton can be made, and ts parameters, ncludng the mean WTP of a populaton n monetary terms, can be estmated from survey data (Lusk and Hudson, 2004). Several approaches have been developed, ncludng the sngle-bounded, the double-bounded, and the mult-bounded approaches. In the sngle-bounded, dchotomous choce approach, the respondent s offered only one bd (a certan product at a certan prce), to accept or reject. Ths method s ncentve compatble because t s n the respondent s strategc nterest to accept whether her WTP s greater or equal to the prce asked and to reject otherwse (Mtchell and Carson, 1989). Utlty maxmzaton mples that a person wll then only answer yes to the offered bd f hs maxmum WTP s greater or equal to the bd. However, the method requres a large sample sze and s statstcally not very effcent (Hanemann et al., 1991). In the double-bounded approach, a second bd s offered, hgher or lower dependng on the frst response. Ths method ncorporates more nformaton about an ndvdual s WTP and, therefore, provdes more effcent estmates and tghter confdence ntervals (Hanemann et al., 1991). The double-bounded approach has been used extensvely n valung nonmarket goods, as well as for consumer acceptance of GM crops (Kaneko and Chern, 2003; L et al., 2002; McCluskey et al., 2003). The analyss, however, requres maxmum lkelhood estmaton, and the nterpretaton s not always straghtforward. Recently, multple-bounded and polychotomous choce methods are beng explored, whch offer multple bds as well as multple response optons (Albern et al., 2003). They allow for multple bds, whch s useful when lmted nformaton s avalable ntally to decde whch bds to nclude. They also allow for multple choces, whch offer the possblty of ncludng optons for uncertanty. Multple-bounded approaches are, however, subject to desgn bas, and are nfluenced by the range of bds ncluded (Roach et al., 2002; Vossler et al., 2004). The underlyng assumptons of the approach when ncludng uncertanty s stll under debate (Vossler and Poe, 2005). More research, currently under way, s expected to shed more lght on these ssues. When ths survey was conducted, however, multple-bounded models were stll beng developed, so the double-bounded model was chosen. Ths method has a good theoretcal justfcaton; t s ncentve compatble and leads to unbased estmates. It s more effcent than the sngle-bounded approach (Hanemann et al., 1991) and has been used n many consumer studes on acceptance of GM food. The maxmum lkelhood procedure usng the logstc dstrbuton s farly straghtforward wth standard econometrc software. Moreover, average prces of related products are suffcently known to help set the bds. Conceptually, the WTP of a group of consumers for a partcular product at a prce (or bd) B can be assumed to have a certan probablty dstrbuton functon. Moreover, ths dstrbuton functon can be seen as a functon of the prce, wth a hgher prce havng a lesser probablty of beng accepted. In appled research, the logstc dstrbuton s commonly used, and the effect of the prce s entered ndrectly n an argument called the ndex functon, denoted as v. The most common ndex functon s lnear n the prce or bd, B: v = α ρb, (1) and the probablty dstrbuton of the WTP s then presented by P (WTP = B) = exp(v)/(1 + exp(v)) 2. (2) The logstc functon has the advantage of a closed-form cumulatve dstrbuton functon G(.), whch then represents the proporton of the populaton whose WTP les below a certan value B: G(B) = P (WTP <B) = exp(v)/(1 + exp(v)). (3) People who would accept an offer of value B are those whose WTP s equal to, or hgher than, B (Hanemann and Kannnen, 1998; Hanemann et al., 1991). In the double-bounded dchotomous choce model, the consumer s presented wth two consecutve bds, and the second bd depends on the response to the frst. If the consumer answers yes to the frst bd (B ), the second bd (B u ) s set hgher, but f the ndvdual responds no to the frst bd, the second bd (B d ) s set lower. There are four possble outcomes: yes to the frst bd followed by a yes to the second bd (wth probablty

7 S. C. Kmenju, H. De Groote / Agrcultural Economcs 38 (2008) denoted by π yy ); yes followed by no (π yn ); no followed by yes (π ny ); and two consecutve no answers (π nn ). To receve nformaton on a wder range of values, dfferent amounts for the bds are assgned randomly between respondents. The probablty of recevng a yes answer to both questons equals the probablty that the respondent s WTP s hgher than the hghest bd offered: π yy( B,B u ) ( ) ( ) = Pr B u <WTP = 1 G B u. (4) Smlarly, the probablty of recevng a yes followed by a no equals the probablty that the WTP of respondent les between the ntal bd and the second, hgher bd offered: π yn( ) ( ) B,B u = Pr B <WTP <B u = G ( ) B u G(B ). (5) The probablty of recevng a no followed by a yes s agan the probablty that WTP les between the ntal and the second, now lower, bd offered: π ny( ) ( ) B,B d = Pr B d <WTP <B = G(B ) G ( ) (6) B d. Fnally, the probablty of recevng two no answers s equal to the probablty that WTP les below the second, lowest bd offered: π nn( B,B d ) ( = Pr B d <WTP ) = G( B d ). (7) Combnng the probabltes of the four outcomes, the loglkelhood functon for a sample of N consumers takes the form N { ln L D yy (θ ) = d ln π yy( B,B u ) + d nn ln π nn( B,B d ) =1 + d yn ln π yn( ) B,B u ny + d ln π ny( )} B,B d, (8) where d yy,d nn,d yn, and d ny are bnary varables wth 1 denotng the occurrence of that partcular outcome, and 0 otherwse. To operatonalze ths model, we need to specfy the cumulatve dstrbuton functon G( ). We use the logstc functon (Eq. (3)) wth a lnear ndex functon (Eq. (1)). Substtutng ths functon for G( ) n Eqs. (4) (7) fully specfes the probabltes of the four outcomes and the lkelhood functon (Eq. (8)). Parameter estmates can then be obtaned by maxmzng the lkelhood functon, the mean WTP s calculated as α/ρ (Hanemann and Kannnen, 1998; Hanemann et al., 1991), and the standard errors are calculated usng the bootstrap method Factors that nfluence WTP Market analyses tradtonally deal wth the demand for homogeneous goods, determned by a set of relevant prces and demographc varables. Demand for qualty trats, however, need not be determned by the same set of varables. Research needs to gve more attenton to the demand for dfferentated, frequently branded food products, to the dsaggregaton of the populaton, and to a recognton that tradtonal demographc factors may have lmted explanatory power (Senauer, 2001). Even f there s an objectve measure of a partcular qualty, t does not follow that all consumers perceve qualty n the same way. It s not unusual to fnd that one consumer s utlty ncreases wth a partcular qualty, whereas another consumer s utlty decreases. In such cases, demand for qualty depends on an ndvdual s knowledge and percepton of that qualty, as well as trust n the authortes guardng ths qualty. The effect of these factors on consumers acceptance of GM food has already been demonstrated n several studes n developed countres and Asa, as was revewed earler, but no such studes have been conducted n Afrca. Gven the general nature of consumer theory, we explore whether the same cogntve varables nfluence WTP n Afrca, n addton to prce and socoeconomc factors. Formally, the probablty of consumer buyng a new product, n partcular a GM food, when offered at a certan prce B can be hypotheszed to be a functon of a vector of cogntve and socoeconomc factors z : π y (B,z ) = π y (v ), (9) where ν, as defned earler, s the ndex functon wth the predetermned relatonshp between B and z, assumed here to be lnear: v = α ρb + λ z + ε, (10) and ε s a random term. As n the basc model of the prevous secton, the probablty of a bd beng accepted (ether the frst or the second bd n the double-bounded method), takng nto account other consumer characterstcs, becomes π y (v ) = 1 G(v ) or π y (B,z ) = 1 1/(1 + exp(α ρb + λ z )). (11) The proper log-lkelhood functon for the double-bound method can then be constructed n analogy to Eq. (8). Based on results from studes on GM food from other regons worldwde, the cogntve factors ncluded were awareness of GM technology (bnary varable), perceptons of GM food as measured by the beneft percepton ndex (I BP ), health percepton ndex (I HRP ), ethcal and equty concerns ndex (I EEC ), and havng trust n the government (yes = 1, no = 0). Further, the socoeconomc varables such as age, gender, presence of chldren n the household, educaton, and ncome were ncluded. For educaton, bnary varables were ncluded for at least some secondary, tertary college, or unversty educaton, wth none or at least some prmary educaton as base. For ncome, bnary varables were ncluded for students wthout ncome and for the low-, mddle- and hgh-ncome groups. The group wthout ncome, excludng students, was used as the base.

8 42 S. C. Kmenju, H. De Groote / Agrcultural Economcs 38 (2008) Fg. 1. Consumers wllngness to buy GM maze meal at the same prce as ther preferred brand (frst bd), at a premum (second bd, after they accepted the frst bd), or at a dscount (second bd, after they rejected the frst bd). Consumers were frst asked whch s ther favorte maze meal brand, and whch prce they usually pay for a 2-kg packet. Then, they were asked whether they would be wllng to buy GM maze meal at that same prce, n Kenya shllngs for a 2 kg packet. Those who answered yes were then asked f they would be wllng to buy GM maze meal at a hgher prce (premum). Therefore, dfferent premum levels were assgned randomly to dfferent respondents (5%, 10%, 20%, 30%, or 50% of the prce of ther favorte brand), but each respondent was only offered one second bd: the prce of ther favorte brand plus the random premum level, calculated by the enumerator and expressed n KShs per 2-kg packet. Respondents who answered no to the frst bd were offered a lower prce; the prce of ther favorte brand, reduced by a randomly assgned dscount (5%, 10%, 20%, 30%, or 50%), calculated n KShs/2 kg. The premum or dscount percentages were equally dstrbuted across the sample. The average prce of the consumers favorte brand was 51 KShs/2 kg, and the second bd ranged from 18 to 105 KShs/2 kg. To calculate the mean WTP, the smple model (wthout consumer characterstcs or settng, all λ = 0) was estmated frst wth the maxmum lkelhood procedure, and average WTP was calculated as α/ρ. The confdence nterval for mean WTP was estmated wth the bootstrap method (Greene, 1991). Then the full model, ncludng consumer characterstcs, was estmated. Margnal effects were calculated to determne the nfluence of respondents characterstcs on WTP. The mean WTP was calculated from the full model, by adjustng the α to nclude the estmated parameters and the average values for the vector of factors z: E(WTP α, λ, ρ, z) = [(α + λ z)/ρ] (12) (after Haab and McConnel, 2002, p. 35). The standard error was agan calculated usng the bootstrap method. The results of the dfferent steps n ths research methodology are presented n the next secton, coverng the level of awareness and wllngness to buy GM maze meal, the estmaton of the short model and calculaton of the average WTP for GM maze, and the analyss of the dfferent factors nfluencng ths WTP. 4. Results A large majorty of the surveyed consumers (68%) would be wllng to buy GM maze meal at the same prce as ther favorte maze meal brand. They are represented by the hatched bars n Fg. 1. A thrd of the consumers (32%), however, rejected the frst bd. They were then offered a dscount, rangng from 5% to 50% of the prce of ther favorte brand, but presented as a monetary amount (n KShs for a 2 kg packet). Of those who were offered the largest dscount (50%), almost half (41%) would accept. In other words, an addtonal 13% of consumers (32% 41%), would be wllng to buy GM maze meal f offered a dscount of 50%. Ths s represented by the gray secton of the frst bar at the left of Fg. 1. Because 68% of consumers would already buy t at no dscount (hatched proporton of the bar), a total of 81% of consumers would buy GM maze at the 50% dscount (represented by the stacked bars). The proporton of consumers acceptng the bd generally declned wth ts sze, down to 31% of consumers acceptng the 5% dscount. Ths represents 9% (32% 31%) of all consumers, so on top of the 68% who accepted the ntal bd, ths makes 77% of consumers who would buy GM maze at a 5% dscount (ffth bar n Fg. 1).

9 S. C. Kmenju, H. De Groote / Agrcultural Economcs 38 (2008) Table 3 Parameter estmates for WTP model wthout consumer characterstcs Varable Estmate Standard error P-value Constant (α) Bd (ρ) Mean WTP (α/ρ) a Number of observatons 553 Log-lkelhood functon Ch-square 1, a Calculated usng the bootstrap method. Indcates statstcally sgnfcant at the 99% confdence level. The 68% of consumers who accepted the frst bd (central bar, at 0% premum or dscount) were then asked whether they would be wllng to buy GM maze meal at a hgher prce, or a premum, rangng from 5% to 50%. Of those offered a premum of 5%, half would accept (next bar on the rght). At a premum of 10%, most consumers (43%) would stll accept. The proporton of consumers wllng to accept the bd generally decreased wth ts sze, wth a quarter of consumers (26%) stll wllng to accept the hghest premum of 50% (last bar on the rght n Fg. 1). The bars roughly represent the logstc curve of decreasng WTP wth ncreased prce. To calculate the mean WTP, the logstc curve was ftted on the data, and the coeffcents of the restrcted Eq. (8) were estmated (Table 3). The mean WTP was calculated from the coeffcents as α/ρ = KShs 58.0 (standard error of 1.129, confdence nterval ). Ths prce was an ncrease of 13.8% over the average prce for the favorte brand (51.0 KShs/2 kg packet), ndcatng that consumers are wllng to pay a premum for GM maze meal. To analyze the mpact of dfferent factors on WTP, the parameters of the expanded model (Eq. (11)) were estmated, the margnal effects calculated at the means of the explanatory varables, and the mean WTP recalculated (Table 4). Calculatng the mean WTP from the estmated coeffcents of the full model, followng Eq. (12), results n an estmate of 57.9 KShs/2 kg packet, slghtly less than the frst estmate, but stll leadng to a premum of 13.8%. Among the factors tested, awareness of GM crops was clearly not sgnfcant. Ths s not unexpected, because unaware consumers were provded wth an explanatory text on the topc. The nformaton provded dd not seem to nfluence ther WTP n a way dfferent from aware consumers, who dd not receve that nformaton. Consumers perceptons, on the other hand, were very mportant. Interestngly, the effects of the postve beneft perceptons were not sgnfcant, whereas the effects of the negatve perceptons, health rsks, and concerns about ethcs and equty were large and sgnfcant. Trust n the government s capacty to control and regulate the ndustry, on the other hand, was a strong postve factor. The sze of the effects can be gauged by analyzng the margnal effects, whch are ndcators of percentage change n people wllng to pay, when all other factors, ncludng prce, are kept at ther average value. An ncrease n the health percepton ndex of 1, for example, decreased the number of consumers wllng to pay for GM maze meal, at the average prce, by 18%. An ncrease n the ethcal and equty percepton ndex Table 4 Parameter estmates for WTP model wth consumer characterstcs Explanatory varable Symbol parameter Estmate Standard error P-value Margnal effects Mean values (z) Constant α Bd ρ Perceptons Awareness about GM crops λ Beneft percepton ndex λ Health rsk percepton ndex λ Ethcal and equty concerns ndex λ Trust n government λ Demographc Age λ Gender (female = 1, male = 0) λ Presence of chldren λ At least some secondary educaton λ At least some tertary educaton λ At least some unversty educaton λ Income None (students) λ Low (KShs 1 15,000) λ Medum (15,001 50,000) λ Hgh (over 50,000) λ Statstcs Number of observatons 553 Log-lkelhood functon 766 Ch-square 1,531 Mean WTP (α + λz)/ρ a a Calculated usng the bootstrap method., ndcate statstcally sgnfcant at the 99% and 90% confdence levels, respectvely.

10 44 S. C. Kmenju, H. De Groote / Agrcultural Economcs 38 (2008) by 1 reduced the percentage of people wllng to pay by 13%, whereas people who trusted the government were 18% more lkely to pay for GM maze meal. Of the socoeconomc characterstcs, only educaton and ncome showed sgnfcant effects. Age, gender, and presence of chldren dd not have sgnfcant effects. The effect of educaton was mxed, however. People wth some secondary schoolng had a sgnfcantly hgher WTP than those wth ether less or more educaton, but those wth hgher educaton levels dd not. WTP does clearly ncrease wth ncome, and consumers n the hgh-ncome group are 30% more lkely to buy GM food. 5. Conclusons The survey results ndcate that more than a thrd (38%) of the consumers n Narob were aware of GM crops. People wth hgher educaton and ncome levels are generally more aware. The majorty of consumers (68%) would be wllng to buy GM maze meal at the prce of ther favorte maze meal brand. On average, they would even be wllng to pay more: a 13.8% premum over the average prce. Narob consumers acceptance of GM food s smlar to that n other developng countres such as Chna, Colomba (Curts et al., 2004; Zhang et al., 2004), Unted States (Chen and Chern, 2002; Ganere and Chern, 2004), and Tawan (Km and Km, 2004). They clearly dffer from consumers n Europe (Moon and Balasubramanan, 2001; Moon et al., 2004; Sprnger et al., 2002), Japan, and South Korea (Km and Km, 2004). However, although respondents n ths study generally apprecated the postve benefts of the GM technology, they were concerned about the potental negatve effects, especally on the envronment and the loss of land races. Econometrc estmaton ndcates that these consumer perceptons have an effect on WTP, as has been observed elsewhere. Awareness and postve perceptons of the technology, however, dd not have sgnfcant effects, unlke the result of consumer studes n Chna (L et al., 2002). Negatve perceptons, n partcular perceved negatve effects on health, had a clear negatve effect on WTP, as observed n other countres (Curts and Moeltner, 2006; McCluskey et al., 2003). Perceved ethcal and equty concerns also nfluenced WTP negatvely. Trust n the government s ablty to ensure food qualty had a postve nfluence on WTP, as has been observed n Europe (Sprnger et al., 2002). Among socoeconomc factors, only ncome and educaton sgnfcantly nfluenced WTP, smlar to the fndngs of Chen and Chern (2002) who found that U.S. consumers wth hgher ncomes were wllng to pay more. People wth at least some secondary educaton have hgher WTP for GM maze meal than those wth only some prmary educaton. Smlarly, consumers wth an ncome hgher than KShs 50,000 per month have a hgher WTP than those n the lowest ncome categores. Consumers demographc characterstcs such as age, gender, and presence of chldren had no sgnfcant effects, unlke n consumers n the Unted States (Chen and Chern, 2002). It also emerges that general knowledge on botechnology and GM technology s lmted, and that some consumers WTP for GM crops s nfluenced by perceptons clearly not based on scentfc evdence. The scentfc communty has come to a consensus, for example, that consumpton of GM foods poses no health rsks dfferent from the consumpton of ther conventonal counterparts (FAO, 2004). Moreover, the new GM maze varetes no longer use antbotc markers, so the transformed plants cannot generate resstance to antbotcs as s often perceved. The postve perceptons, on the other hand, have scentfc justfcaton, but do not seem to nfluence WTP. Because ths nformaton s mportant for people to partcpate effectvely n the debate, there s a need for ncreased educaton on GM technology. Attenton s needed to communcate the effects of GM crops to consumers. Regular consumer surveys wll better nform scentsts and meda practtoners about the perceptons regardng GM crops n the country. Gven the experence of ths survey, some methodologcal mprovements can be suggested for future studes. For nstance, people mght be asked to elaborate on the reasons for ther opnons or perceptons. We found that consumer characterstcs, as well as perceptons and atttudes, dffer between socoeconomc groups, and that dfferent groups buy ther maze at dfferent types of outlets. Therefore, household surveys, although more expensve, would yeld more representatve results. Ths survey only covered urban consumers n the captal cty. To capture consumers opnons fully, surveys n other urban centers and rural areas are needed. Based on experence n other countres, other approaches should also be consdered. Several studes have used expermental auctons (Lusk et al., 2003), although they requre that GM food s approved for testng n the country. In CV, multple-bound polychotomous choce methods are becomng more promnent. These have the advantage that they allow for the ncluson of uncertanty, whch mght be of partcular nterest for consumer surveys on GM food. Acknowledgments The authors would lke to thank the Syngenta Foundaton for Sustanable Development for fundng ths study through the IRMA project. We also thank Anneme Verdurme and Jacques Vaene of Ghent Unversty for ther help wth the survey desgn. We are grateful to Augustne Langyntuo, Joseph Karuga, Davd Watson, Gregory Poe, and two anonymous revewers for ther very useful and extensve comments; the enumerators for ther dlgent work; Dasy Ouya and Kathy Snclar for edtng; and the CIMMYT-Narob staff for ther support. Fnally, we would lke to thank the staff and management of the outlets where the survey was conducted, and, most mportantly, the Narob consumers who partcpated n the survey.

11 S. C. Kmenju, H. De Groote / Agrcultural Economcs 38 (2008) Appendx: Informaton text presented to respondents unaware of GM crops Transgenc crops (generally referred to as genetcally modfed crops) contan genes that have been artfcally nserted by scentsts nstead of the plant acqurng them from pollnaton. The nserted gene may come from plants of the same speces, another unrelated plant, or from other organsms such as bactera. Tradtonal breedng takes a long tme to acheve desred results and frequently fals. GM technology enables scentsts to brng useful genes from a wde range of lvng sources to a crop plant, not just from wthn the plant speces or from closely related plants. Ths allows scentsts to generate superor plant varetes quckly and wth precson, and add trats that are not possble through conventonal breedng. Trats targeted by plant breeders for genetc modfcaton nclude plant characterstcs such as ncreased yelds, dsease resstance, and pest resstance; plus consumpton trats such as food color, sze, shape, nutrton, and taste. KARI, together wth nternatonal research organzatons, s undertakng research on GM maze and sweet potato. Ths s amed at developng nsect-resstant maze (Bt maze) and vrusresstant sweet potato. Insect-resstant maze wll enable the maze plant to protect tself aganst nsects (n partcular stem borers) by producng ts own nsectcde. The use of GM crops has resulted n sgnfcant benefts where these crops are grown. These are 1. hgher yeldng crops that address food shortages, 2. reduced losses from nsect pests and dseases, 3. reduced pestcde costs, 4. reduced pestcde resdues n the envronment, 5. lower food prces for the consumers because of lower producton costs, 6. ablty of plants to grow n harsh and stressful condtons, and 7. reduced toxc health effect on farmers. Future GM crops wll have trats that wll beneft consumers. Ther potental benefts nclude 1. nutrtonally enrched foods that help allevate malnutrton, 2. edble vaccnes for chldren dseases (e.g., polo) n food crops and fruts, and 3. food that stays fresh for longer perods. Potental rsks and perceved concerns about GM crops are 4. the danger of unntentonally ntroducng allergc substances or toxns to foods, 5. the possblty of these genes escapng from cultvated crops nto wld relatves, 6. the possblty that transgenc crops carryng antbotc genes wll generate antbotc resstance n lvestock and humans after eatng food from these crops, 7. the potental for pests to develop resstance to the pestcde produced by GM crops, and 8. the rsk of substances from these crops affectng nontarget and benefcal nsects. Generally, after genetc modfcaton, seeds are tested to ensure ther safety for human consumpton. Then plants are tested n a specal bosafety green house to check ther effectveness, such as nsect resstance. If these trals proceed wthout problems, the authortes may gve permsson for trals on test plots n quarantne statons. If these trals go well, scentsts may seek permsson to try the varetes on the farm. After successful trals for several years, authortes can grant permsson to commercalze and sell these varetes to farmers. Most GM crops are grown n the developed countres especally the Unted States and Canada. Some developng countres, such as Chna and Inda, have adopted the technology. In Afrca, commercal growng s takng place n South Afrca only. These crops have, however, not generally been accepted n Europe. Kenya s not growng them commercally but s dong research n order to develop nsect-resstant maze and vrus-resstant sweet potato. The leadng GM crops grown n the world are soybean (herbcde resstant), maze, and cotton (both nsect and herbcde resstant). (Note: To half of the ntervewed consumers, the secton of the potental rsks and dangers was read before the secton of benefts). References Albern, A., Boyle, K., Welsh, M., Analyss of contngent valuaton data wth multple bds and response optons allowng respondents to express uncertanty. J. Envron. Econ. Manage. 45(1), Arrow, K., Solow, R., Leamer, E., Portney, P., Radner, R., Schuman, H., Report on the NOAA Panel on Contngent Valuaton. U.S. Fed. Regst. 58(10), Carlsson, F., Frykblom, P., Lagerkvst, C. J., Consumer benefts of labels and bans on genetcally modfed food an emprcal analyss usng choce experments. Paper presented at the Annual Meetng of the Amercan Agrcultural Economcs Assocaton, 1 4 August, 2004, Denver, CO. Central Bureau of Statstcs, Populaton and Housng Census. Volume 1. Populaton Dstrbuton by Admnstratve Areas and Urban Centres: Government Prnter, Republc of Kenya, Narob, Kenya. Chen, H., Chern, W. S., Consumer acceptance of genetcally modfed foods. Paper presented at the Annual Meetng of the Amercan Agrcultural Economcs Assocaton, July, 2002, Long Beach, CA. Chern, W. S., Rckertsen, K., Tsubo, N., Fu, T.-T., Consumer acceptance and wllngness to pay for genetcally modfed vegetable ol and salmon: a multple-country assessment. AgBoForum 5(3), Curts, K. R., Moeltner, K., Genetcally modfed food market partcpaton and consumer rsk perceptons: a cross-country comparson. Can. J. Agrc. Econ. 54(2), Curts, K. R., McCluskey, J. J., Wahl, T. I., Consumer acceptance of genetcally modfed food products n the developng world. AgBoForum 7(1/2), De Groote, H., Bett, C., Okuro, J. O., Odendo, M., Mose, L., Wekesa, E., Drect estmaton of maze crop losses due to stemborers n Kenya, prelmnary results from 2000 and In: Fresen, D. K., Palmer, A. F. E. (Eds.), Integrated Approaches to Hgher Maze Productvty n the New