Researchers are trying to answer that question through several studies that intend to take emotions out of an angry debate between animal welfare groups and producers.
At issue are small cages, typically 24 inches wide by 25 1/2 inches deep, that can be shared by up to nine hens. About 96 percent of eggs sold in the United States come from hens who live in the so-called battery cages from the day they're born until their egg-laying days end 18 to 24 months later.
Public opinion appears to side with those who oppose the cages. Voters in California approved a proposition last year that bans cramped cages for hens. And Michigan's governor signed legislation last month requiring confined animals to have enough room to turn around and fully extend their limbs.
Peter Skewes, a Clemson University researcher, is leading one of the studies comparing how different housing affects egg-laying hens. He said there are plenty of "emotional" opinions about whether the cages are inhumane, but few are based on facts.
"Hopefully we will contribute something so decisions can be made based on science and knowledge about how we house birds and the implications for different systems," said Skewes, who is in the early stages of a three-year study funded by the U.S. Department of Agriculture.
But even as Skewes and others conduct research, some question the need to study an issue they argue was resolved long ago.
Bruce Friedrich, a spokesman for People for the Ethical Treatment of Animals, said banning the cages is a solution to an obvious problem.
"Think about the ... effects of not moving for up to 24 months," Friedrich said. "Their bones and muscles waste away and they go insane."
Paul Shapiro, senior director of the Humane Society of the United States' Factory Farming Campaign, agreed.
"The egg industry is trying to muddy the waters by misleading people into believing that it's possible to confine birds in barren, tiny cages and have high welfare," he said.
Producers see it differently, claiming caged hens are healthier and satisfied with the only lives they've ever known. Although the chickens can't fully extend their wings, producers contend they're not stuffed so tightly that they can't move around the cage.
"Is this animal cruelty? This absolutely is not," said Bob Krouse, an egg producer based in Mentone, Ind., and president of the United Egg Producers industry group.
Or as K.Y. Hendrix, owner of Rose Acres Farms in Seymour, Ind., puts it, "We can produce a better egg, produce a healthier chicken if we keep them inside."
Producers began experimenting with hen cages in the late 1950s. By the early 1970s, cages were commonly used for egg-laying hens and are now the standard home for hens, which can lay up to 300 eggs a year.
Hens lay eggs for up to two years, then typically are used as meat for humans or animal feed.
Whether they're a delaying tactic — as animal welfare groups claim — or needed research, studies on chicken cages are proceeding.
Skewes will compare emotional and behavioral patterns of caged hens with non-caged counterparts. Part of that will including studying behaviors such as wing-stretching, perching and foraging.
"We're looking at what ... things they would still do if given the opportunity," Skewes said. "So you deprive them of that, and the welfare component is, so what? There are difficult questions."
Another study, coordinated by the University of California at Davis and Michigan State University, weighs several issues involving caged chickens, including their welfare and impact on the environment and human health as well as food quality and safety.
The study, funded by the American Egg Board, also considers the economics of egg production. In California, producers estimated the voter-backed rules would add about a penny to the cost of each egg, but Krouse put the cost at up to 50 cents per dozen eggs.
"We hope we can say ... what the effect is going to be on prices, the environment and on the welfare of hens," said Joy Mench, a UC Davis researcher.
UC Davis and Michigan State also plan another study that will include several advisers, including food companies such as McDonald's and Cargill Inc., the Department of Agriculture's Research Service, and groups such as the American Veterinary Medical Association and the Center for Food Integrity.
Mench said that study will examine egg production sustainability, hen welfare, worker safety, food safety and food quality.
Dr. Gail Golab, director of the veterinary association's Animal Welfare Division, said she hopes the studies can clarify the debate.
"A number of us that work in the animal welfare field are frustrated at efforts to say one system is all good or all bad and not being able to quantify welfare values," Golab said. "(We want to) look for the best possible solution we can for raising these animals."