Fifteen Eighty Four

We share the fondness many people have for dogs. In the United States, approximately half of households express their fondness by opening their doors, and most often their hearts, to dogs. Indeed, a majority of these households views dogs as family members. Dogs are thus not only commodities traded in markets but also cherished household members. In Dog Economics we explore this duality as well as other aspects of our relationships with dogs through the lens of economic concepts.

Dogs have attracted much scholarly attention from behavioral biologists, ecologists, veterinarians, anthropologists, archaeologists, sociologists, and historians––we draw on their research to convey much information about dogs, which should interest scholars in these fields as well as general readers. Although economists have done relatively little research on dogs, many of their concepts help us better understand our relationships with dogs. We see the application of these concepts as a first step toward the establishment of the field of dogonomics.

As about half of college students grew up in households with dogs, and Dog Economics introduces and applies important economic concepts relevant to their experiences with dogs, we believe that it will make an excellent supplementary text for microeconomics courses. Some examples: The increase in the number of dogs adopted during the COVID pandemic can be understood as both the increased value of companionship and lower opportunity costs of having dogs when people are isolated in their homes. Dogs as complements to, or substitutes for, children illustrate concepts from the economics of the family. The harm to dogs caused by puppy mills can be analyzed as resulting from the market failures due to information asymmetry and negative externalities. The increases in the demand for dog breeds featured in movies can be explained by the economic theory of fads. Theories of the origin of the affinity between people and dogs and their subsequent co-evolution provide an introduction into simple classical and evolutionary game theories.

Several chapters provide novel perspectives on aspects of our canine relationships. A chapter introduces the value of statistical life used to monetize avoided human deaths from regulations; it then reports on research that used stated preference methods to estimate a “value of statistical dog life” for use in regulatory analyses as well as being potentially informative in cases of the wrongful deaths of dogs. This chapter would be particularly valuable for exposing students to the careful application of stated preference methods.

Another chapter, “Working for the Man,” catalogs canine occupations from the perspectives of comparative versus absolute advantage, introducing a powerful concept from trade theory. In addition to surveying the various roles of working dogs in terms of comparative advantage and training requirements, it presents cases that illustrate the application of cost-benefit analysis concepts––the social value of guide dogs and the federal rule change that switched emotional support dogs from service animals to pets for purposes of air travel. The chapter also considers tradeoffs between screening by breed and training in efficiently creating canine workers.  

Sadly, dogs do not live as long as humans. Consequently, most dog owners will face end-of-life issues with their dogs. The chapter on end-of-life decisions, such as euthanasia and heroic medical care, applies a principal-agent framework to explore the implications of different fiduciary responsibilities for owners and veterinarians. It explores the implications of pet insurance, including the possibility of moral hazard leading to excessive heroic care. It also addresses the economics and morality of the use of dogs in medical research. We enjoyed writing this book. It led us to much interesting research on dogs that we convey to our readers. It also gave us an opportunity to explore what aspects of our relationship with dogs benefit from the application of economic concepts. With the comprehensive glossary of economic terms we provide, the book will be accessible even to those with no prior study of economics. We think it will also have substantial pedagogical value in microeconomics courses.