The Social Value of Animal Welfare: A Revealed Policy Preference Approach

When a regulation raises the price of a good voters regularly buy, market purchases and referendum votes identify two distinct equilibrium objects. Purchases reveal what consumers are willing to pay for the regulated good unilaterally; votes reveal what they are willing to pay for the collective outcome the regulation produces. The difference is non-use value—willingness to pay for components of the policy that are totally disconnected from private consumption— and it is identified by combining the two data sources without restriction on how consumption and public-good preferences interact in utility. The framework jointly models pocketbook and public-good channels within a single voting equation, identifying the former from market data outside that equation, and provides the first revealed-preference decomposition of total willingness to pay for a public good into use and non-use components. I apply the framework to California’s Proposition 12 (2018), a ballot initiative that mandated cage-free housing for laying hens and passed with 63 percent support despite raising egg prices. A logit demand model on NielsenIQ retail scanner data yields a median private MWTP of $0.11 per dozen against an average cage-free premium of $1.06; a fractional logit of precinct-level vote shares on a supplyside- instrumented “non-use price” yields a coefficient of −0.063 (SE = 0.010). The recovered WTP distribution implies that over 85 percent of voter benefit—roughly $17 of $20 per capita per year—is non-use, and predicts that 64 percent of Californians had positive net WTP for the policy, matching the actual 63 percent Yes vote out of sample. The framework extends to any referendum in which the voter’s cost is a commodity price change and a substitute for the regulated good trades in observable retail markets.