Economic analysis increasingly attempts to incorporate animal welfare values. These approaches can strengthen the case for welfare policy interventions by quantifying costs and benefits.
Animal welfare economics attempts to quantify the social value of welfare improvements in terms that economic decision-makers can incorporate into policy analysis. Traditional cost-benefit analysis of welfare regulations counted only human economic impacts such as producer costs and consumer price effects, systematically undervaluing animal interests. Welfare economics approaches try to capture the positive value of welfare improvements through willingness-to-pay studies, quality-adjusted life year adaptations, and suffering-based metrics. These approaches remain methodologically contested but are gaining traction in policy circles. Incorporating animal welfare into agricultural economic modelling can demonstrate that welfare improvements often deliver net social benefits even when producer costs are included.