School of Public Policy Capstones

Publication Date



Legislation concerning the well being of farm animals has become a major focus in the animal rights movement, especially as it pertains to intensive confinement systems, such as housing egg-laying hens in battery cages. Informational asymmetries in the market for eggs represent a market failure, as producers have few incentives to inform consumers on modern egg production methods, which they may perceive as cruel. This study uses cost-benefit analysis to examine the effects of a hypothetical U.S. ban on caged egg production to assess whether such a standard would produce use and non-use benefits in excess of producer and consumer costs. Newly available data on the value of human altruism towards layers is considered, in addition to changes to consumer and producer surplus, as well as producer transition costs. I find that $57 billion in benefits compared $38 billion in costs is realized as a result of a cage-free mandate. The findings, however, show that 95% of the benefits arise from the high values for altruism that are enjoyed by only a small portion of the U.S. population with very strong preferences for farm animal welfare. Further, higher egg prices may disproportionately affect the poor, as eggs are an inexpensive source of high-quality protein. In the short term, instead of outlawing battery cages, animal advocacy groups should focus on legislation mandating producers to label egg cartons with information on housing systems in order to better inform consumers on the matter and help narrow the wide gap in consumer preferences.