Another perspective:

Let us consider the benefits to the farmer per bird per year (chicken lays eggs for about a year and lenses are not
reusable)
The sources of benefits are:

1. Reduced chicken mortality.

Mortality reduced from 9% to 4.5%
The cost of a chicken: = $ 2.4 x 4.5% Reduction in mortality = 10.8 cents

The benefits are most sensitive to the assumption that lenses work to reduce mortality. For example, if they
fall off, mortality may go back not to 9%, but to 25%! (since chickens are not debeaked). The benefit of
reduced mortality then may be negative.

2. Feed savings
Assume that the feed depth is reduced by ½ inch. Some of you might have assumed that the feed depth is reduced
by 1 inch. But note that the data in the case about per 1 inch reduction has nothing to do with debeaking, so
whatever height reduction you used, you must justify (the case argues for “at least 3/8 inch”). 156/2 [for ½ inch per
day ] x 1/20,000 [per chicken] x $ 158/2000 [ per lb] x 365 days = 11.25 cents Note the sensitivity to the reduction
of depth and average depth. Note also that the whole calculation is hypothetical since the data is not on the
chickens with lenses vs. debeaked. But the risk is probably limited and there is no reason to believe that chickens will
bill more or eat more. So, probably more upside potential then its downside.

3. Extra egg production

This could be because of less trauma. Based on one egg increase relative to debeaking per chicken per
annum: 1 egg * 1/12 * $ 0.53 = 4.5 cents. Note that since most costs are not variable in eggs, one should use
revenue per dozen as opposed to average profit per dozen. Some of you may have assumed that 1 egg is per
week (the case is not very clear, although this would contradict the statement that the egg production
retardation is not much.

4. Labor cost of inserting lenses versus that of debeaking

This can be seen as a wash (220/hr debeaking vs. 225/hr. lenses). But: sensitivity to the assumption of new labor
costs? We know the old cost, but the new estimate of chicken/hour is from one team only! Might be negative. Thus
the total calculable economic benefit to the chicken farmer over debeaking = 25.75 cents

5. Other benefits/risks:
Some other benefits you might have thought about:
 Humane treatment. But would it be worthwhile to educate consumers? Probably not = $0 benefit.
Things that can go wrong – since this is a new product: increased mortality if lenses are not placed in correctly or
have side effects (i.e., eye infections).