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How should we price the "public option" for dogs?
David, a loyal MR reader, asks:
Why do I have to make an appointment, wait in line, fill out a slew of paperwork, and pay $70 to adopt a dog that otherwise would likely have been euthanized (at the taxpayers' expense), and yet bringing your very own human child into the world takes nothing more than a few shots of tequila or a broken condom?
I am not suggesting that we stand at a first-best equilibrium, but I can think of one reason for this apparent pricing anomaly. If dogs were free (or if dog ownership required only that you show up with a fresh condom), too many people would experiment with owning dogs and then abandon them to the public commons. The $70, or whatever it costs, screens for serious dog owners, as does the paperwork requirement.
So should the price of kids be changed? I would suggest that for most women bringing a child into the world (much less raising it) requires more than "a few shots of tequila or a broken condom". That too screens for serious mothers to some extent. If we raised the price of kids, as we could do easily with tax law and EITC reforms, we'd have fewer kids in the world. If we raised the price of adopting dogs, there would be more do-it-at-home puppy production and more dogs. Neither population change strikes me as an especially desirable outcome and thus we have what we have.
Posted by Tyler Cowen on November 3, 2009 at 12:16 PM in Economics, Law | Permalink
Comments
I think David's point is that the upfront cost of a dog is higher. You may be able to raise the price of a child, but is it really viable to raise the upfront cost? When the costs are born (so to speak) makes all the difference I think.
Posted by: Kevin Postlewaite at Nov 3, 2009 12:34:57 PM
Even at $70 and having your house verified as a safe habitat, you can still find boxes of puppies out in front of your local Mart, usually in the spring. It's more of an argument of 'freedom of choice' by the adopter and adoptee.
Posted by: moonshiner at Nov 3, 2009 12:41:33 PM
Well...except that there's no particular reason to re-abandon the dogs on the public commons when there's still the shelter that the dog came from in the first place, is there? Some number of the people put off by expensive pet adoptions would have turned out to be at least adequately attentive pet owners, and when the alternative is doggy death row, what does the dog have to lose? If you were a dog waiting to be euthanized, would you prefer a $70 or $0 adoption fee?
Posted by: Slocum at Nov 3, 2009 12:47:04 PM
Requiring a payment before having a child would make government mandated abortions the default option upon pregnancy. I'd like to see a politician run on that platform...
Posted by: Dave at Nov 3, 2009 12:56:05 PM
I think the costs of raising kids is rising, regardless of EITC. And, EITC isn't rising either. So the cost, and not the price, of having kids is rising. The question is: will a poor parent sacrifice the interest of the kid to pay for the cable fees. Sorry, but I know the answer. And, raising the price of kids, by cutting EITC, isn't going to reduce the supply. We'll just have impoverished kids going to school hungry living in stressed out families.
Posted by: Bill at Nov 3, 2009 12:57:21 PM
"If we raised the price of adopting dogs, there would be more do-it-at-home puppy production and more dogs"
I don't understand or agree with that statement. Why would having more do-it-at-home pupuuy production result in us having more dogs? I don't understand this logic.
Posted by: Tony at Nov 3, 2009 1:05:39 PM
My family fosters puppies for the Humane Society. The Humane Society pays to spay/neuter the dog, get it up to date on vaccines and microchip it. The adoptive owner pays $200 for the dog, which helps to compensate the society for those costs.
The other reason that the society charges is that it separates those who understand that there's a lot of cost involved in having a dog from those who don't. If you're not willing to pay for the initial shots, will you be willing to pay for annual shots or for food?
Puppies are like blogs -- easy to start, hard to maintain. By paying a price, prospective owners signal that they're willing to maintain that puppy.
Posted by: Chris at Nov 3, 2009 1:12:40 PM
I volunteer with a rescue group. Like Chris said, the adoption fees typically cover a number of routine medical procedures, and the fees help cover the rescue group's costs. That said, it rarely covers all of the rescue group's costs and is usually a better deal than it would have been to have gotten the same services from your vet for the free puppy you pick up outside Walmart.
$70 is actually a great deal. Most groups charge $150+.
Posted by: Jen (SLC) at Nov 3, 2009 1:26:54 PM
Commonly in shelters I have dealt with, there is an "adoption fee" for puppies and kittens and only paperwork hassles for other pets (though some shelters charge a fee for all pets). The intuition behind the paperwork is that adoptions of rescue animals should be delayed in order to allow diligent families to self select. The stated reason has something to do with frequent flyers and abusers, but I suspect that employee familiarity is the only real defense against that.
The reasoning behind the puppy/kitten fee should be obvious. In my opinion it doesn't have to do with offsetting costs (though obviously it does), more to do with establishing a threshold price for desirable animals in order to take advantage of demand elasticity. Just like airlines and universities, we naively expect that segregated fees be attached in an accounting sense to costs, but money is fungible.
Posted by: Adam Hyland at Nov 3, 2009 1:27:30 PM
"If we raised the price of kids, as we could do easily with tax law and EITC reforms, we'd have fewer kids in the world." My information may be dated, but my recollection is that the data don't support this prediction at least for teens and young women at the lower end of the income spectrum.
It's not "most women" I concerned with. It's those who are unprepared to care for their children, bring them into a disadvantaged environment, and may in essence "abandon them to the public commons" while keeping in their household.
It seems to me that what David is implying has merit. While incentives _can_ matter we need to make them salient by thinking behaviorally -- i.e., where the simple model homo economicus does not apply. Some babies are conceived and brought into an environment of disadvantage. How do we get mothers of these children to think about the cost before they are conceived?
Posted by: John B. Chilton at Nov 3, 2009 1:49:44 PM
How do we get mothers of these children to think about the cost before they are conceived?
Personally, I like the idea of saddling tweenagers for a month or two with those faux babies that cry, have to be changed and fed, etc.
But even then, in some groups having a kid demonstrates that the teenage mother is "all grown up." And the fathers of these children seem to like it too as it demonstrates what "a man" they are.
Posted by: anon at Nov 3, 2009 2:31:55 PM
I work with abused and neglected children. Raising the price of kids born to unmarried mothers under the age of, say, 25 would be a very good thing. Maybe a special tax on people who have five crack babies in five years and give them all up right after they're born wouldn't do much harm, either.
Posted by: Alan Gunn at Nov 3, 2009 3:04:59 PM
Clearly, that depiction of the upfront costs of bringing a child into the world is told from the male point of view.
Posted by: Norman Pfyster at Nov 3, 2009 3:08:45 PM
It seems your reader made a major mistake- that was confusing the price of something with the lowest possible price of something. In many areas David could just start putting out table scraps by his back door and have stray animals find him- which he could then adopt for near zero. Meanwhile at a bar the average expense of that one pregnancy from Tequila + a broken condom is much, much higher. Every guy who bought drinks for a woman but went home alone would realistically go into that equation.
Posted by: tom at Nov 3, 2009 3:25:26 PM
I have to admit that dogs are consumables, not producers. They will never pay taxes, they will never invent the next great mathematical theorem.
You pay for dogs because the cost of preparing them for adoption is larger than the price of putting them down. It's like arguing why should I pay for a paperback when the publisher is just going to throw thousands of copies away.
I don't know if people should pay per baby, but in Los Angeles you need a "breeder's permit" to have more than three dogs, perhaps we should have something like that for having more than three children :)
On the other hand, I really don't think tax policy should encourage people in poverty to have more children. The longer they can put off children, the greater the possibility that they might get the skills and job experience to leave poverty.
I'm not sure why anyone, even the rich, should get tax breaks for having children, when we know that public education costs money per child.
Posted by: Mr. Econotarian at Nov 3, 2009 3:35:56 PM
1. Um, the upfront cost of a kid is 9 months of pregnancy and labor. Also if you live in the US, the medical bills associated with it.
This is MUCH higher than the dog.
Posted by: Doc Merlin at Nov 3, 2009 3:39:07 PM
It's cheaper for a person to adopt a dog than a dog to adopt a person.
Posted by: josh at Nov 3, 2009 3:44:24 PM
Why don't we just ask kids from low-income families if they would prefer to not have been born? But seriously, I'm sure running away is correlated to wealth, but is it correlated to a greater degree than would be expected? In other words, running away from a no-income family to a no-income whatever presents no opportunity cost. Can you split out the economic incentive of running away from the social capital incentive of running away from a bad family? Is the family poor because they are bad? Is family income versus dysfunctionality a greater predictor of runaway?
This abstract doesn't even mention income
http://clemson.library.ingentaconnect.com/content/sbp/sbp/2000/00000028/00000003/art00005
This paper is interesting
http://digitalcommons.unl.edu/cgi/viewcontent.cgi?article=1049&context=sociologyfacpub
I don't really read tables, but they say socioeconomic status is a predictor but they also say...
"Although we find that in general youth from adverse backgrounds
are more likely to leave home, our results indicate that these explanations
may not be equally applicable to minority youth. That is, although
African American and Hispanic youth were more likely to
come from adverse backgrounds characterized by lower SES and
greater environmental risk compared to White youth (results not presented
here), they were less likely to run away."
As for strays, the $70, minus admin costs, should go to the person who brought the dog in. Then you'd have to deal with the "we only rescue attractive dogs" problem, but burn that bridge when we come to it.
Posted by: Andrew at Nov 3, 2009 3:52:54 PM
I would argue that the additional needed calric intake over the 40 weeks of being pregnant is one upfront cost, and in case he did not know, being pregnant does not appear to be a picnic of bubbles and rainbows....
Posted by: Joe at Nov 3, 2009 4:03:10 PM
The doubled Child Tax Credit expires after 2010, dropping from $1,000 per child back to $500. It may be interesting to see how that will play out. Will those in power dare to be "for taxes" and "against children" and let it expire? More here.
Posted by: John Mansfield at Nov 3, 2009 4:05:20 PM
Perhaps we should force David to make an appointment, wait in line, fill out a slew of paperwork, and pay $70 to have sex?
Posted by: Jim at Nov 3, 2009 4:09:57 PM
as someone raised by stray dogs, i think this conversation is a bit silly and not all in good taste.
Posted by: rob at Nov 3, 2009 4:51:20 PM
"Every guy who bought drinks for a woman but went home alone would realistically go into that equation."
tom, I appreciated your comment.
Posted by: John Dewey at Nov 3, 2009 5:12:57 PM
Sure, some of the costs of having a child are nine months of pregnancy and labor, but the mother does not begin to bear them until a month or two after sex. How many low-income single parents are trained to consider costs a week out, let alone a month or two, or the costs of years of child-rearing?
Posted by: Neal at Nov 3, 2009 5:31:35 PM
Awesome! You used my comment!
Of course the question is more of an observation. I'm not really advocating for increasing the cost of children or decreasing the cost of dogs. But I think this observation has some explanatory power. In most cases, you actually have to put some honest effort into finding yourself in possession of a dog, and yet there are SO many mistreated and abandoned dogs out there.
Of course, most mothers put much thought into childbearing. But there are enough mothers out there who don't--per the Freakonomics-abortion debate--that you HAVE to expect a crazy number of mistreated children.
Thanks Tyler!
Posted by: David at Nov 3, 2009 5:45:27 PM
