The emergence of GM food products in China
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This dissertation explores issues related to economic impacts of Genetically Modified (GM) foods on both demand side and futures market side. The primary objectives involve measuring the college students’ willingness to pay toward GM food products in both the U.S. and China, testing the market response linkages between the GM and non-GM soybean prices in China’s futures markets and examining the dynamic correlation be-tween them. The first section examines the willingness to pay for multiple nutrition-enhanced GM grain breakfast products. Our study provides results using mixed-logit model to analyze choice experiment survey data. The results reveal that college students from the U.S. and China are both willing to pay a premium for products with attributes of non-GM, less pesticide/herbicide use and food quality certification from U.S. However, the attributes of additional nutritional benefits, the U.S. brand, origin of raw material from the U.S. are significant only for the U.S. students, the attribute of food quality certification from China is only valued differently by Chinese students. The second section examines how efficiently the Dalian Commodity Exchange's non-GM and GM soybean futures markets react to three events including two contract specification changes from the exchange and one law issue by testing the influence of the above changes on the price premium (the price difference between non-GM and GM soy-beans). We first use Bai-Perron test to find the structure change point of the premium series. Next we test the intervention effect of events in each sub-periods. The results show that the specification changes of contract do have effects on the price premium. Also, the law issue has a huge positive permanent effect on the price premium. The third section explores the co-movement between these two soybeans markets. We analyze the volatility by incorporating changes in important economic variables into the DCC-GARCH model. This research provides statistical evidence that the futures prices of soybeans in China are being influenced by the increasing consumption of soybeans, the import quantity of soybean, the trading volume in futures market and weather. We also find spillover effect from non-GM to GM in soybean markets.