Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/271793 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 10149
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Within a general equilibrium model, this paper identifies a novel animal welfare externality that occurs if the private animal friendliness in a market economy falls short of the social animal friendliness used by the social planner when determining the efficient allocation. The animal welfare externality causes an inefficiently high quantity and an inefficiently low quality of animal food. Correction of this market failure is attained by taxing animal food output and subsidizing animal food quality. With consumer and producer heterogeneity, regulation is the same but sector-specific, with a more intense regulation in the sector with the worse living conditions of animals.
Subjects: 
animal welfare
altruism
morality
non-anthropocentrism
meat tax
subsidy on animal food quality
JEL: 
D62
H20
Q18
Document Type: 
Working Paper
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