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Why does animal welfare matter? For some, it is because people care about animals; for others, it is because animals themselves are morally relevant. Given the importance of welfare in economics research and the debates around climate change and biodiversity loss, more economists are becoming interested in the economics of animal welfare. Animal Economics provides a general introduction to this new field. It explores the complexity of the behavioral attitude of humans toward animals using behavioral economics and explains how existing economic theory can be applied to understand animal welfare as an externality. Combining theory and empirical research to address key issues in animal welfare, including ethical perspectives, public opinion, market demand, and policy design, this book builds on economics principles to explore how to implement optimal policies that reflect human proanimal concerns and the moral status of animals.