Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 119: Farm Animal Welfare - testing for market failure
Fredrik Carlsson (), Peter Frykblom and Carl-Johan Lagerkvist ()
Additional contact information
Fredrik Carlsson: Department of Economics, School of Economics and Commercial Law, Göteborg University, Postal: Box 640, SE 405 30 GÖTEBORG
Peter Frykblom: Department of Economics, Appalachian State University, Postal: Boone, North Carolina 28608-2051
Carl-Johan Lagerkvist: Department of Economics, Swedish University of Agricultural Sciences, Postal: Box 7013, SE 750 07 UPPSALA
Abstract: Our increasingly heterogeneous food is at least partly due to concerns over conventional production of farm livestock. Some of these new products have been demand driven while others are a result of politically decided restrictions on production techniques. From a policy perspective, the interesting question is whether there exists a market failure. We suggest a survey design that enables the researcher to measure the eventual external market failures in farm livestock production. Applying this survey design to the question of battery cages in egg production, we cannot show that there exists a market failure. The policy implications are applicable to not only the question of egg production, they can be extended to a general discussion of how potential market failures for all kind of farm livestock should be managed. Logically, if an external effect cannot be shown, the consumer is better off herself making the choice of how her food is produced.
Keywords: Animal welfare; choice experiments; market failure
21 pages, November 24, 2003
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