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Consumer Impact of Animal Welfare Regulation in the California Poultry Industry

Author:
Allender, William J., Richards, Timothy J.
Source:
Journal of agricultural and resource economics 2010 v.35 no.3 pp. 424-442
ISSN:
1068-5502
Subject:
animal welfare, consumer surplus, egg production, eggs, households, laws and regulations, poultry industry, production costs, willingness to pay, California
Abstract:
This study examines the consumer welfare impact of animal welfare legislation mandating cage-free egg production in California. We estimate California egg consumers’ willingness to pay (WTP) for cage-free eggs using household-level purchase data and compare the implied premium to higher production costs when calculating the potential change in consumer surplus. Our findings suggest that larger households and/or households with limited means are most likely to be affected. Furthermore, the implied welfare loss for consumers is approximately $106 million. Although consumers value cage-free eggs, higher production costs result in a net welfare loss to consumers. One implication of this finding is that a clear labeling practice may be a more efficient way to motivate animal welfare and non-cage systems.
Agid:
5945247