Animal Welfare or Own Welfare: What Motivates Consumers’ Choice of Cage‐Free Products?

ABSTRACT This study addresses the puzzle of animal welfare regulations consistently passing by majority votes, despite potential welfare losses evident in market data. To understand this phenomenon, we propose a conceptual framework that considers two possibilities: first, animal welfare might not be valued in the market, as suggested by classical externality analysis, and second, it could be valued due to altruistic motivations. To illustrate the framework, we uncover the motives driving consumers’ demand for animal welfare products jointly utilizing the results of a discrete choice experiment and respondents’ perception data obtained in China. Our findings align with the predictions made by classical externality analysis, indicating that the public good aspect of animal welfare is not valued in this market and thereby challenging the existence of altruistic behavior. Moreover, our analysis of consumer heterogeneity reveals that as consumers’ knowledge increases, they exhibit a decreased inclination to prioritize the animal welfare attribute for fulfilling their private needs, and may raise concerns about the safety of animal welfare‐friendly products.