Market failure for the treatment of animals

Abstract

In this work, the author examines the undertreatment of animals from the perspective of economic ordinalism, according to which only human market demand curves should inform the valuation of animals. The author builds a model where animals are allocated to sectors that treat them better or worse, arguing that in a competitive market, too many animals will be allocated to the less salubrious sector due to an externality impacting animal lovers. The optimal solution entails a marginal tax on the less salubrious sector and a subsidy to the more salubrious sector. The author concludes that current treatment of animals is suboptimal, proposes a number of policy recommendations informed by this model, and argues that these are robust even if one allows for the possibility of interspecies utility comparisons. – AI-generated abstract.