A high consumption of meat – and animal-based products in general – is a common practice all over the world [pdf] and over the past decades, global meat production has been rising. Whereas it is generally recommended for a person to eat not more than 70 grams a day, individuals in countries such as for example Argentina and Luxembourg consumed in 2013 on average 293.8 and 270 grams a day, respectively.
Understanding what induces meat consumption is important, as high meat consumption can negatively affect the long-term well-being of our ecosystems (a “market failure”).
Many factors influence meat consumption. These include, but are not limited to, an individual’s living situation, social identity, knowledge and skills, and one’s cultural and political norms and values. Although these factors determine to a certain extent why people consume meat, it is not always clear whether this is really a voluntary choice, or a choice encouraged by economic incentives.
Except for the factors above associated with individual dietary choices, a look at meat consumption from a national level can show how “market dynamics” can increase meat consumption.
Meat producers respond to meat consumption. Economically speaking, the choice to consume meat can be seen as a vote to produce meat, which can explain record global meat production (see figure below). Higher consumption spurs investment in production (and subsequently sunk costs in capital and machinery) in the meat industry, which makes it easier to increase economies of scale, thereby making meat cheaper and meat alternatives relatively more expensive. Following the law of demand, a lower meat price – ceteris paribus – will lead to a higher quantity demanded. Furthermore, this will also likely reduce demand for substitute goods, such as more-sustainable meat alternatives. Consequently, this can engender a rather path-dependent process in which more meat is consumed and produced, thereby encouraging less-sustainable meat eating.
On the other hand, sustainable eating can also reflect incentives rather than choices. Considering that meat can be too expensive or not accessible, populations may be (financially/economically) incentivized to consume little meat. This may be better for animal welfare and ecosystems, yet it does not guarantee a more prosperous and equitable society. In poor countries, consumption of protein is low, yet it would be better for health and well-being (and thus economic prosperity) if these populations included more protein – such as meat – in their diet.
Therefore, when talking about meat consumption and sustainability through an economic lens, it is important to consider the impact of consumer choices on our environment as well as underlying mechanisms affecting those choices. To improve the long-term well-being of our ecosystems and economies, national and global economic policies need to consider all the factors encouraging (and discouraging) meat consumption.
* Please help my Environmental Economics students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice :).