I know this much is true: “a dog is a man’s best friend.” Mine is certainly my best and most loyal companion. He is considered as a family member, even designated as the baby of our family. It seems like having a dog nowadays is akin to having a child, grandchild or sibling. This evolutionary relationship started when dogs became the first animals to be domesticated, something that happened between 15,000 and 40,000 years ago, with dogs beginning to evolve to get along with us. Around 15,000 to 20,000 years ago, humans became less nomadic, and about 500 years ago, they started selecting dogs as companions, specifically those that can read social cues.
It is no surprise that the human-canine relationship runs deep. Modern humans most likely do not rely much on dogs nowadays to help with physical tasks like pulling carts or herding sheep but provide other psychic benefits such as emotional support and companionship. And that translates to a whole (thriving!) industry into itself.
The pet industry is approximately valued at $303 billion and the canine/dog segment is the majority of this market share. Growth in the pet industry was fueled by the pandemic, as seen by the need for pet companionship; our dog was a perfect example of this. The continuous growth of this industry is a testament to how much we as humans value our pets.
Behavioral economists have endeavored to measure consumers’ willingness to pay with regards to caring and even saving the lives of their pets. Colleen Kirk from the New York Institute of Technology conducted a study showing that people will pay more for medical, insurance and pet products for dogs than cats. Dog owners of this study were willing to pay $10,689 to save their pet while cat owners are only willing to pay for half that amount ($5,174). Interestingly, this difference is based on the pet owners perceived pet’s behavior which affects the owner’s feelings of ownership and attachment to the pet. Dog behaviors are generally more valued than those of cats. Surprisingly, or maybe not, the respondents reversed their valuation of their pets if a dog behaves like a cat and a cat behaves like a dog. Interestingly, another study conducted by Deven Carlson confirms that the statistical value of a dog’s life is around $10,000 as well.
Willingness to pay or WTP for short is important in economics because it helps determine the value of a product or service. A person buying a good gives up a certain amount of money in exchange. Because of an individual’s willingness to part with their money in exchange for the product, it means that they place a higher economic value to the good than the amount of money they give up. It’s value, or its price, is one way to determine that item’s economic value.
But what about the value of a life, in this case, a dog’s life. While it seems almost callous to quantify the value of one’s life and its importance, it is very much essential. It is important to assign value to them to help government regulators to protect their health and safety. Costs and benefits are important to facilitate these processes. Valuing their lives is also important in event of remuneration for injuries or death of a pet, usually associated with the emotional distress of the pet owner.
I still consider my dog’s life and presence in my life as priceless, but it is also comforting to know that assigning an economic value to his life is essential to keep him healthy and safe via regulations. That way, he can continue living a happy and healthy life and continue being the joyous and spritely dog that he is!
The Gist:
The canine-human relationship runs deep, stretching thousands of years.
Because of such a deep relationship, the pet industry, specifically for dogs, is a booming one.
Many people are willing to pay $10,000 for a dog’s life, effectively quantifying its average value.
Quantifying abstract qualities like a life are important, oftentimes helping government regulators provide remuneration or protect their health and safety.
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