Over the past few decades the relative price of eggs has fallen dramatically in New Zealand. This has been made possible, at least in part, by the application of increasingly intensive agricultural practices. However, there is also growing pressure from consumers and animal rights groups around the world to ban the use of conventional/barren cages for egg production on animal welfare grounds. In this paper a simple partial equilibrium model is used to provide a preliminary estimate of the welfare effects of moving to alternative housing systems for egg laying hens in New Zealand. Results indicate that in a market where demand is relatively inelastic and trade is restricted for sanitary reasons, the cost of improving hen welfare will be born largely by consumers. This raises difficult distributional issues, as market research indicates that nearly 80% of the eggs currently sold in New Zealand supermarkets are cage eggs, and the heaviest purchasers of eggs are those with large families and limited budgets.


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