Consumer Impact of Animal Welfare Regulation in the California Poultry Industry
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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.
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