Proposal
California’s Proposition 12, which outlaws the use of cages in the egg production process, went into effect on January 1, 2022. The main focus of this study is to follow the trend of weekly Californian and national egg price changes before and after the implementation of Proposition 12. Using the price series reported by the United States Department of Agriculture (USDA), structural break tests and Ordinary Least Squares (OLS) regressions are carried out to directly measure the economic impacts of this new regulation on egg prices. With different models used, this study shows that California consumers now pay an additional $0.25 to $0.73 for a dozen eggs due to the new regulation, resulting in a state-level annual loss in consumer surplus of $223 million to $664 million.
Recommended Citation
Xie, Mingcong
(2023)
"Sales of Cage-Free Eggs: The Impact of Proposition 12 on Egg Prices and Consumer Welfare in California,"
The Journal of Purdue Undergraduate Research:
Vol. 13, Article 11.
DOI: https://doi.org/10.7771/2158-4052.1637
