Regulating Food Nanotechnology: Consumer Attitudes and Labeling Regimes as Determinants of the Effects of Food Nanotechnology
(Project Leaders: Amalia Yiannaka and Konstantinos Giannakas)
Background/Justification. The use of nanotechnology in all phases of the food cycle from farm to fork has the potential to revolutionize the agri-food sector by increasing food supply, quality, and safety.1 While the potential benefits of food nanotechnology can be immense, its potential risks are not well understood by either the scientific community or the general public. Concerns involve the potential toxicity of nanoparticles that may be inhaled by humans during their production or escape from engineered structures into food or the environment. Recent polls in both the European Union (EU) and the United States (U.S.) show that the public lacks awareness of nanotechnology and its applications to the food sector (NanoBio-Raise 2007). A 2007 study of risk perceptions of nanotechnology of 1,850 U.S. consumers found that 81% of participants had either heard nothing at all (53%) or very little (28%) about nanotechnology, but nevertheless 53% viewed benefits as outweighing risks. An important finding of the study was that the effect of information on risk perceptions depends heavily on people emotions and values; people with different values are predisposed to draw different factual conclusions from the same information (Kahan et.al 2007). This implies that while the provision of information about nanotechnology that is scientifically sound is important, it is even more critical that one frames this information so that people of diverse values could draw the same factual conclusions from it (Kahan et.al 2007).
According to some estimates, hundreds of nanofoods and food packaging applications are already in the market (NanBio-Raise) and, given current regulations, labeling of these products is not required. However, efforts are underway in both the U.S. and the EU to regulate food nanotechnology, and while in the EU proposed regulations mandate labeling for nanotech products, it is unclear whether these products will be mandatorily labeled in the U.S.2 Given the tremendous potential of food nanotechnology, scientists and developers of the technology seem determined to not repeat the mistakes of biotechnology (Stone 2009, NanoBio-Raise 2011); understanding the public perceptions of the technology and preference for different regulatory regimes will not only point to effective means to communicate its benefits and potential risks but also affect willingness to pay for the technology and consequently its market success.
This project will utilize an adaptation of the methodological framework of heterogeneous agents and imperfectly competitive firms and economics choice experiments to examine the role of consumer attitudes and labeling regimes in determining the market potential of food nanotechnology and its implications for the agri-food sector and the interest groups involved.
Objective 1: Utilize the methodological framework of heterogeneous agents and imperfectly competitive firms to identify the determinants of market acceptance and success of food nanotechnology and specify the exact conditions under which the technology will end up being ineffective, non-drastic, and drastic.
Objective 2: Design economic choice experiments to empirically study general consumer attitudes toward nanofoods and nanotech applications that could enhance food safety (e.g., smart packaging) and estimate consumer willingness to pay for these products/ processes under different information structures. Specifically, we will examine how the labeling regime (e.g., voluntary versus mandatory), the source of information (e.g., government, NGOs, scientific/academic community), the framing of the information provided (e.g., negative or positive) and the nature of the nanotech attribute (i.e., search or credence) affect consumer attitudes and willingness to pay for nanofoods.
Objective 3: Use parameter estimates from the empirical studies (Objective 2) to calibrate the analytical model (Objective 1) and, through simulations, determine the magnitude of the market and welfare effects of food nanotechnology applications.
1 Current and potential food nanotechnology applications include: the use of nanosensors for monitoring crop growth and pest control and identifying animal and plant diseases; the use of nanoencapsulated additives and ingredients that enable changes in food texture, taste, processability and quality; nano food packaging material that is more durable, light, can repair tears, can respond to environmental conditions (e.g., moisture, light), improve food safety (e.g., use of carbon nanotubes in food packages which were shown to kill e.coli bacteria on contact), signal whether food is contaminated or spoiled (using biosensors) or release preservatives that can extend food life (Sekhon 2010).
2 In the U.S., the Environmental Protection Agency (EPA) is developing a Significant New Use Rule (SNUR) to ensure that nanoscale material receives appropriate review while the Food and Drug Administration (FDA) outlines that the paradigm for regulation of these products is based on the concepts of "risk management", i.e. risk identification, risk analysis, and risk control. The EU is implementing a new Classification Labeling and Packaging regulation requiring that the classification and labeling of nanomaterials will be done on a case-by-case basis and based on the precautionary principle.