The publication comes as the Australian racing industry is debating the use of whips and follows the $50,000 fine handed to jockey Kerrin McEvoy for excessive whip use in the Melbourne Cup.
That fine was subsequently halved on appeal.
Racing Victoria is leading a push to gradually phase out the use of whips altogether.
In a statement released in September, Racing Victoria chief executive Giles Thompson said: "Australian racing has been left behind when it comes to reforms on whip use."
Racing NSW has a completely contrary view, with its CEO Peter V'Landys recently saying, "we've got to educate the public the whip doesn't hurt".
But the new study reports "humans and horses have the equivalent basic anatomic structures to detect pain in the skin."
"Our conclusions are that we need to accept that the physical capacity of horses to accept pain is clear," said the report's author, Paul McGreevy, the Professor of Animal Behaviour and Animal Welfare Science at the University of Sydney.
Professor McGreevy said he was looking to understand "one of the holy grails in equine welfare - that is a sense of what horses may feel when they are contacted by a whip," he said.
The use of whips was debated at a board meeting of Racing Australia, but the organisation wouldn't comment on its discussions.
Currently, jockeys can use padded whips five times in non-consecutive strides prior to the 100-metre mark of a race and at the riders' discretion for the remainder of the race.
Racing Victoria believes that's out of step with community values.
"Britain, Ireland, France, Germany and key states in the USA have either implemented or announced significant reductions in permitted whip use and have seen great competitive racing continue," said Giles Thompson.
Professor McGreevy's team compared nerve endings in horse and human skin and found that while horse skin is thicker overall, it doesn't insulate them from pain.
Professor McGreevy said the study, published in the peer-reviewed online journal Animals, is the first of its kind in the world.
The research was funded by RSPCA Australia, but Professor McGreevy, who initially trained and worked as a vet, said that does not constitute a conflict of interest and he was happy to take the funding.
"I've been studying horse behaviour and animal welfare science for nearly 30 years and I can see that these issues really do need to be addressed using a scientific framework," he said.
"I always adhere to the scientific framework, but as a veterinarian, there is an expectation that I will advocate for animals."
He said his team applied what's called the "precautionary principle", the assumption that humans and mammals feel similar sensations, a principle accepted by the National Health and Medical Research guidelines.
"We were interested in the thickness of the base layer, which is called the dermis and also the outer layer, called the epidermis, and what's important is what lies between those two areas and that's where the nerve endings are found," Professor McGreevy said.
"Horses and humans have the equivalent basic anatomical structures to detect pain in the skin."
Professor McGreevy recently published another paper in Animals comparing "whipping-free" races in Great Britain with "whipping-permitted" races.
"We found no significant difference to the movement of horses to the left or right across the course, the safety of jockeys and even the finishing times of races."