The Economics of Farm Animal Happiness

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Once limited to activists, the debate over the welfare of animals in agriculture has become a major concern for agricultural producers. In a new article, two economists discuss what everyone can learn from the existing economic research on animal welfare, and what questions still need to be answered when it comes to the happiness of farm animals.

The debate over the welfare of animals in agriculture used to be limited to activists. Now, it’s become a major concern for agricultural producers, as consumers become more aware of the issues involved and new polices on the subject are being developed at the local and federal level. Yet, the economic implications of adopting new standards has only recently begun to be studied. In a new article, two economists discuss what everyone can learn from the existing research, and what questions still need to be answered when it comes to the happiness of farm animals.

Writing in the latest issue of Applied Economic Perspectives and Policy, Jayson Lusk and Bailey Norwood of Oklahoma State University discuss the importance of economic research in this debate. “As this debate gains some steam, it’s crucial that we understand the different economic forces at play, and how they would be impacted by efforts to increase animal welfare,” Lusk said.

In one example, Lusk and Norwood discuss the fact that increasing the happiness of animals means increased production. One would assume that based on this, the most profitable approach for a farmer would be to make the animals as happy as possible. Not always, the authors say, as sometimes it makes more economic sense to sacrifice the happiness of each animal, so that you can have more animals producing. “Producers are not paid based on the number of eggs produced per hen, but rather on the total number of eggs coming out of the barn,” they explain.

In the context of these realities, it can be difficult to craft policies that adequately address the issue. Calling an all out ban on particular practices a “blunt policy instrument,” the authors discuss the merits of other approaches, like adding food labels to products that meet a certain standard or creating explicit markets for the level of animal welfare produced on a farm. “Letting consumers decide what products to buy may end up being as effective as a blanket policy, with fewer unintended consequences,” Lusk said.

The full text of this article, “Animal Welfare Economics” will be available at http://www.aepp.oxfordjournals.org on Thursday, November 17. The article will be published in Volume 33, Issue 4 of AEPP. A companion podcast has also been produced featuring an interview with Lusk and Norwood, which will be available online soon.

Applied Economic Perspectives and Policy is a journal of the Agricultural & Applied Economics Association and aims to present high-quality research to a broad audience of agricultural and applied economists, policy-makers and consumers. AEPP is published by Oxford Journals (http://www.oxfordjournals.org).

The Agricultural & Applied Economics Association is the nation’s largest professional association of agricultural and applied economists. AAEA strives to enhance the skills, knowledge and professional contribution of economists who help society solve problems related to agriculture, food, resources and economic development. Members work in various capacities including universities, private industry and government agencies. For more information, please visit http://www.aaea.org.

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