Consumer Impact of Animal Welfare Regulation in the California Poultry Industry

• Main Authors: William J. Allender, Timothy J. Richards
• Format: Article
• Language: English
• Published: Western Agricultural Economics Association 2010-12-01
• Series: Journal of Agricultural and Resource Economics
• Subjects: animal welfare regulation; california poultry; egg prices; egg supply; hen housing; mixed logit; willingness to pay
• Online Access: https://ageconsearch.umn.edu/record/97856
• ISSN: 1068-5502; 2327-8285

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.