1.1. Topic Relevancy and Background
If there is only to be one argument for the relevancy of analysing meat consumption and its consequences, then it is the fact that Bill Gates, third richest man in the world and very likely a genius, is heavily invested in it as well (Beverland, 2014). Meat consumption and reduction has been a topic of debate over the last decade. On the one hand, we can see an increase in vegetarians and vegans and a raise in people`s awareness concerning the effect meat consumption has, yet simultaneously there is an increase in meat consumption (Sveriges Officiella Statistik, 2019, p. 13; Säll, 2018). The one side argues for the cost and negativities meat bring, whereas the other side emphasises the benefits. But who wins the debate and why?
The arguments against include topics such as environmental protection and climate change; health damage caused by excessive meat consumption, as well as meat production inefficiencies. Pro-meat consumption arguments also focus on health, but also on culture and personal utility, and nutritional value (Beverland, 2014; Abadie, Galarraga, Milford, & Gustavsen, 2015; Kutasi & Perger, 2015; Springmann, Godfraya, Rayner, & Scarborougha, 2016).
Assuming truth and relevancy to both sides, it is of interest to evaluate the cost and benefits in numeric terms and compare which argument may outweigh the other. This could lead to better understanding of why people may or may not consume meat. It may also provide relevant insight for policy makers, debating whether or not and how meat consumption should be limited or influenced in any way. Some countries, such as Sweden and Denmark, have in the past considered to implement a meat tax, citing lower health care costs, reduced environmental damage and heightened productivity, yet so far, they have not implemented it long-term (Beverland, 2014).
Welfare effects of policies limiting meat consumption have only been scarcely researched. The recent increase in research topics concerning meat consumption and production indicate however its current relevancy (Säll, 2018); hence a focus on welfare is warranted. What will be particularly new is the comparison between welfare and cost measurement of meat consumption, which to the author’s knowledge has not been done
to that extent before. The focus is in particular on Sweden, due to the country’s policy maker’s high interest in the topic. In addition, there already exists literature which permits delving deeper and creating more novel and relevant research output.
The author’s motive in choosing this topic was a deep personal interest in the topic of nutrition, paired with a curiosity of sustainable practices, when it comes to food sourcing. The current global interest into meat consumption practices did contribute in choosing this subject. Furthermore, a liking to the field of economic research also greatly contributed. Sweden as a country was chosen mostly due to its topic relevancy and being a sustainability focused country. Overall, the topic sparked the author’s interest and the quantity of interesting research kept it going.
1.2. Thesis Hypotheses and Research Procedures
The overarching aim of this thesis is to see whether meat consumption poses more benefits or costs on consumers and the society they live in. For this, the thesis investigates potential externality cost of meat, as well as its utility. It further focuses on taxing meat consumption and evaluates the amount of compensation needed for consumers to regain the same utility as before taxation. Six research areas were identified and formed into hypotheses, forming the base of this thesis. These are:
Hypothesis 1: Meat consumption causes unaccounted cost (=externality cost) on society.
Hypothesis 2: Meat consumption generates personal utility to the consumer.
Hypothesis 3: Meat consumption’s demand is not perfectly inelastic.
Hypothesis 4: A tax on meat would reduce the amount of meat consumed by consumers.
Hypothesis 5: Taxing meat consumption would cause a loss of consumer utility.
Hypothesis 6: By limiting meat consumption, the reduction in a) Health Cost
b) Environmental Cost
each outweigh the utility that individuals receive from consuming meat.
The methods to answer the different questions range from investigating existing literature, to a quantitative study, and will be discussed in more detail in Chapter 4.1.3.
Cost of Meat Consumption
On the one hand, the purpose is to investigate if and what cost meat consumption poses on society that may not be included in its price. In other words, one aims to investigate if the current price fully covers the social cost of meat. This led to the following hypothesis:
Hypothesis 1: Meat consumption causes unaccounted cost (=externality cost) on society.
Utility of Meat Consumption
On the other hand, the author wanted to investigate the utility meat brings to its consumers and showcase its value in society. Therefore hypothesis 2 was formulated as follows:
Hypothesis 2: Meat consumption generates personal utility to the consumer.
Elasticity and Taxation
In order to investigate the impact a tax on meat has on society, one has to investigate the cost and utility of meat. Also, consumer behaviour relating to a change in price needs to be discussed. Therefore, three separate hypotheses were generated.
First, consumers price elasticity will be evaluated. The hypothesis below aims to prove that any change in price will have some impact on the quantity of meat demanded.
Hypothesis 3: Meat consumption’s demand is not perfectly inelastic.
This builds the basis for the next hypothesis, investigating taxation of meat, where the aim is to prove that a tax indeed would reduce meat consumption.
Hypothesis 4: A tax on meat reduces the amount of meat consumed by consumers.
Assuming a tax were to be imposed, the paper will also investigate whether this causes a reduction in utility for the individual consumer.
Hypothesis 5: Taxing meat consumption causes a loss of consumer utility.
Cost or Utility
Lastly, the overarching research question was stated as a hypothesis and aims to be answered.
Hypothesis 6: By limiting meat consumption, the reduction in a) Environmental Cost and b) Health Cost each outweigh the utility that individuals receive from meat.
The goal is to put numbers on the different aspects. This is done by using data from reliable secondary literature, where utility is measured, and cost is assessed. In other terms the two following research questions were identified:
RQ A: Does the reduction in environmental cost due to limited meat consumption outweigh the loss in consumer welfare caused by a reduction in their meat consumption?
RQ B: Does the reduction in health cost due to limited meat consumption outweigh the loss in consumer welfare caused by a reduction in their meat consumption?
Each hypothesis builds on the previous one and is fundamental to the outcome validity of the paper. The hypotheses aim to guide the research and strengthen the scientific approach of the paper. All hypotheses and research questions were carefully investigated and are based on a multitude of sources to come to a conclusion.
1.3. Knowledge Advancement and Limitations
As stated, the author hopes to create valuable new insights into whether and how meat consumption should and could be regulated, by comparing and quantitatively evaluating existing and new data. With this in mind, there have been certain limitations in investigating the topic at hand. On the one hand, the magnitude of the existing research,
as well as its conflicting nature, makes it difficult to determine one clear path or solution to the given problem. In particular, the variety of opinions on the health effect meat consumption may or may not have, as well as the utility it provides, can be difficult to navigate.
Furthermore, research has been conducted in a number of different environments, making it difficult to rightfully compare. Environmental damage caused by cattle may be very different in the United States, Mexico or Sweden, due to different regulations in land usage, animal rights and feeding policies. Also, factors, such as local climate, have an impact (González-García, Esteve-Llorens, Moreira, & Feijoo, 2018).
It has also been proven that the impact on health varies greatly per region and is also tightly linked to consumer knowledge and education, as well as consumer wealth. More affluent countries may benefit more from meat reduction policies than poorer ones. In particular the cost that meat consumption poses on society due to health care cost, change tremendously depending on the local health care system. A country such as Sweden faces higher health care cost than the United States of America (Springmann, et al., 2018).
Special attention needs also be given to a potential bias of the researcher of this paper, as well as the authors of secondary literature consulted, the survey participants and lastly the very reader of this paper. As meat consumption is a highly emotional topic, a certain bias may be unavoidable. To limit the influence of the authors personal bias, a variety of secondary literature was consulted, with a focus on finding peer-reviewed and widely cited papers. The aim was also to present both sides of the argument and let the reader of the paper form conclusions of their own. Furthermore, the practical research was done numerically and quantitatively, to limit personal bias influencing research subjects and to be able to come to a more qualitative result.
These are just some of the difficulties that the author encountered during the research of this paper. The specific limitations concerning the research methodologies used will be discussed in Chapter 4.1.2. in more detail. Areas of future research, which will be partially based on research limitations, are also discussed in Chapter 6.2.