Economic analysis of animal welfare helps identify the most cost-effective interventions and understand the true costs of poor welfare in food production.
The dominant narrative that welfare improvements are economically incompatible with competitive farming ignores substantial evidence to the contrary. Welfare problems impose direct costs through mortality, medication, and productivity losses that are frequently underestimated. When welfare costs are properly accounted for including reduced animal suffering as a social cost, higher welfare systems often compare favorably. However, individual farmers face transition costs and competitive disadvantages when acting unilaterally. Policy frameworks that require welfare improvements across entire industries level the playing field and allow welfare improvements that markets alone cannot achieve.