Economic analysis of animal welfare improvements shows that higher-welfare production can be commercially viable, and that the costs of welfare improvements are often modest relative to the benefits.
Economics matters for animal welfare because markets drive production practices. Understanding the cost structure of welfare improvements allows advocates to target the most cost-effective interventions. Many welfare improvements — enrichment for pigs, water quality management for fish, litter management for poultry — generate productivity co-benefits that reduce or eliminate their net cost. Higher-welfare products command price premiums in some markets. Policy interventions that correct market failures — labelling requirements, minimum standards, transparency regulations — can move large quantities of production toward better welfare at lower cost than voluntary action alone.