I mentioned this in a previous comment, but in case readers missed it:
The increase in flock size from December 2015 to December 2017 is far better explained by the US egg industry’s recovery from an avian influenza outbreak than by cage-free pledges.
Norwood and Lusk (2011) estimate based on price elasticity data that, on the margin, a reduction in demand for 1 conventional egg causes a reduction in supply of 0.91 conventional eggs. But correspondingly, an increase in demand for 1 cage-free egg should lead to an increase in supply of less than 1 cage-free egg. So it’s unclear why we should expect the transition to cage-free to increase the number of layer hens. If anything, the increase in prices caused by the transition should reduce the number of layer hens.
Thanks for this. The true cost-effectiveness estimate should still be reduced by whatever the displacement effect is, even if it isn’t large. If we expect 9% of a conventional egg to be consumed for switching demand to 1 cage-free egg, then we should adjust the impact of the campaign downward by whatever the welfare effect of 9% of a conventional egg is.
I mentioned this in a previous comment, but in case readers missed it:
The increase in flock size from December 2015 to December 2017 is far better explained by the US egg industry’s recovery from an avian influenza outbreak than by cage-free pledges.
Norwood and Lusk (2011) estimate based on price elasticity data that, on the margin, a reduction in demand for 1 conventional egg causes a reduction in supply of 0.91 conventional eggs. But correspondingly, an increase in demand for 1 cage-free egg should lead to an increase in supply of less than 1 cage-free egg. So it’s unclear why we should expect the transition to cage-free to increase the number of layer hens. If anything, the increase in prices caused by the transition should reduce the number of layer hens.
Thanks for this. The true cost-effectiveness estimate should still be reduced by whatever the displacement effect is, even if it isn’t large. If we expect 9% of a conventional egg to be consumed for switching demand to 1 cage-free egg, then we should adjust the impact of the campaign downward by whatever the welfare effect of 9% of a conventional egg is.