A book I’m particularly excited to read that came out earlier this year is Dog Economics: Perspectives on our Canine Relationships. This book, written by two of the leading economists in the public policy field, applies a range of economic concepts to dogs and their relationships with human beings.
I first was exposed to David Weimer’s work on dog economics when I was serving as editor for On Balance, the blog for the Society for Benefit-Cost Analysis. Weimer had recently won the Society’s Journal Article of the year award for an innovative analysis he had done to estimate the value of a statistical life for dogs.
Why calculate the value of a statistical life for dogs? Well the reason is because federal agencies sometimes promulgate regulations that will directly impact canine well-being. Weimer was drawn to this idea because the Food and Drug Administration had conducted a benefit-cost analysis on approval of a new type of dog food. A glaring omission from the analysis? The risk to health for dogs who consumed the product.
But how do we calculate the value of safer dog food? When human beings participate in the labor market, they trade off risk of death for more pay. Using these tradeoffs, we estimate how much people value marginal reductions in risk of death, which allows us to come up with the value of a statistical life.
Dogs don’t participate in the labor market. In a literal sense, dogs don’t participate in markets. They don’t have income, they don’t have assets, they don’t purchase goods and sell their services. So how can we estimate a dollar value they put on reductions of their risk of death?
Weimer’s answer is to ask their owners. Weimer conducted a “contingent valuation” study to see how much value people put on their dogs’ lives. He did this by posing questions about hypothetical vaccinations for dogs that would reduce dogs’ likelihood to contract potentially deadly diseases. By eliciting the willingness to pay dog owners have for these vaccinations, Weimer was able to derive a value of statistical life for dogs.
This is certainly a step in the right direction for incorporating the value of public policy to animals into cost-benefit analysis. But this approach still falls short of fully incorporating animals into cost-benefit analysis. Why? Because it defines the benefits that accrue to animals through their owners’ altruism rather than on their own terms.
This would be sort of like if you surveyed people on how much less income they’d be willing to take on as a family in order for their spouses to have the opportunity to take on less dangerous jobs. It should be a good proxy for the value of a statistical life, but a more accurate measure would come from seeing how much people actually take on themselves, not relying on a report from someone who cares about them.
This approach is taken often when assessing benefits to children. But even here we see problems. In his book The Child Care Problem: An Economic Analysis, economist David Blau talks about the market failure caused by parents underconsuming high-quality child care. This happens because parental demand for child care that will nurture their children and lead to better outcomes for them and society falls short of the optimal social benefit. If children could rationally decide for themselves what quality child care to consume, they would likely be willing to pay more for quality child care than parents do.
For now, though, it is difficult for us to divine how much of a value of risk of death dogs take on themselves. Some cutting-edge researchers are conducting studies with chickens, seeing how much feed they are willing to give up in order to live in more free-range environments. The results are promising: initial studies have found chickens exhibit a rational demand curve for more open space.
Non-human animals are not as different from humans as we act like they are. They have to operate under conditions of scarcity just as much as humans do. And they are often subjected to the impacts of public policy just like human beings are. Hopefully as we innovate new ways to study public policy, we will also find ways to incorporate their interest into our benefit-cost models.