The Economics of Meat and Its Alternatives

Why global meat consumption rises with income, its environmental costs, and the economic prospects for plant-based and cultivated alternatives.

As people become richer, they tend to eat more meat, dairy and eggs. Global meat production has grown several times over since the 1960s. This shift has major consequences for land, water, climate and health.

Why meat consumption rises with income

Meat is typically more expensive per calorie than grains or pulses, so rising incomes allow families to buy more of it. China’s meat consumption, for example, rose dramatically as incomes grew from the 1980s onward. India is an important exception: many Indians are vegetarian for religious and cultural reasons, and meat consumption per person remains low, though consumption of milk and eggs has grown strongly.

The resource costs

Producing meat requires feeding animals, which takes more land and water than eating crops directly. The feed conversion ratio measures how many kilograms of feed are needed per kilogram of meat. It is much higher for beef than for chicken. Livestock farming uses a large share of the world’s agricultural land and, according to the FAO, accounts for a significant share of global greenhouse gas emissions, mainly from cattle.

These environmental costs are largely externalities, not reflected in meat prices.

Alternative proteins

New products aim to offer meat-like foods with lower environmental costs:

Plant-based meat, made from ingredients such as soy and pea protein, from companies like Beyond Meat and Impossible Foods.
Cultivated meat, grown from animal cells in bioreactors. Singapore became the first country to approve its sale in 2020.
Fermentation-based proteins.

After rapid growth, sales of plant-based meat in the United States slowed in the early 2020s, as some consumers found products too expensive or not tasty enough. Cultivated meat remains expensive and faces challenges in scaling up.

The price gap

For many shoppers, the main barrier to plant-based meat is price. If a plant-based burger costs more than a beef burger and tastes different, most consumers will stick with beef. Economists expect alternative proteins to spread widely only if they match meat on both price and taste, which requires large production scale and continued innovation.

Policy options

Options discussed by economists include removing subsidies that encourage livestock overproduction, pricing emissions, funding research on alternatives and improving livestock efficiency.

Thinking the choice is all meat or no meat

Many of the environmental gains discussed by researchers come from moderate shifts, such as eating less beef or more chicken, pulses and dairy, rather than eliminating animal products entirely. Small changes across many people add up.

Key takeaways

Meat consumption tends to rise with income, though India remains largely vegetarian.
Meat, especially beef, requires more land and feed and causes significant emissions.
Environmental costs are externalities not reflected in meat prices.
Plant-based and cultivated alternatives exist, but price and taste limit their spread.