The price of cage‐free eggs: Social cost of Proposition 12 in California

Sohae Eve Oh and Tomislav Vukina

American Journal of Agricultural Economics, 2022, vol. 104, issue 4, 1293-1326

Abstract: In November 2018, California passed the so‐called Proposition 12 that completely bans selling eggs produced in any type of cages by the end of 2021. The objective of this study is to estimate the welfare effects of Proposition 12 in a partial equilibrium setup where both the supply and the demand side of the market are simultaneously modeled. Our estimates show that the implementation of Proposition 12 would result in welfare losses for both buyers and sellers of eggs in California. The state‐level expected annual welfare loss to households amounts to $72 million, whereas the industry level losses at the retail level amount to 18% of their original quasi profits.

Date: 2022
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https://doi.org/10.1111/ajae.12279

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Persistent link: https://EconPapers.repec.org/RePEc:wly:ajagec:v:104:y:2022:i:4:p:1293-1326

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