Economic analysis of animal welfare reveals that market mechanisms alone are insufficient to achieve welfare outcomes that align with consumer values, requiring complementary regulatory and policy approaches.
Animal welfare economics reveals a structural tension: individual consumer choice is insufficient to drive the welfare improvements most people say they want, because individual behavior is constrained by availability, price, and the collective action problem. Each person acting alone faces higher costs for higher welfare products while the benefits are distributed across all animals in the system. Regulatory floors that apply to all producers eliminate competitive disadvantage for welfare-conscious producers and deliver welfare improvements at scale without requiring individual consumers to pay premiums. Both market signals and regulatory approaches are needed — market signals to drive innovation, regulation to establish universal baselines.