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

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  • Sohae Eve Oh
  • Tomislav Vukina

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.

Suggested Citation

  • Sohae Eve Oh & Tomislav Vukina, 2022. "The price of cage‐free eggs: Social cost of Proposition 12 in California," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(4), pages 1293-1326, August.
    • Handle: RePEc:wly:ajagec:v:104:y:2022:i:4:p:1293-1326
    DOI: 10.1111/ajae.12279
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    1. Hanbin Lee & Richard J. Sexton & Daniel A. Sumner, 2023. "National and subnational regulation of farm practices for consumer products sold within a jurisdiction: California's Proposition 12," Agricultural Economics, International Association of Agricultural Economists, vol. 54(6), pages 838-853, November.

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