Why are Americans spending so much on pets?

According to the 2011-2012 American Pet Products Association (APPA) National Pet Owners Survey 38.9 million U.S. households own a cat and 46.3 million U.S. households own a dog.  The numbers are even more staggering when broken down by the total number of pets owned: 86 million cats and 78 million dogs.  Pet ownership is costly; in 2011 $50.96 billion was spent on pet related expenditures. Only 4.2% of the $50.96 billion was related to live animal purchases.  The American Pet Products Association predicts that in 2012 $52.87 billion will be spent in on pet related expenditures. 

In considering these expenditures it is pertinent to review the market demand geographically.  Esri, a geographic information system (GIS) company, created the Canine Country map.  A map of the U.S. which displays the demand for dog treats.  The site also provides an interactive map for one to search within their state, territory, or zip code to see where the demand is highest.  Do You Live in Cat Country? and Do You Live in Canine Country?  color-code the demand for dog and cat treats.  Areas shaded dark brown are where dog and cat treats are in highest demand.

APPA has data beginning in 1994 where U.S. households spent $17 billion per year on pet related purchases.  The expenditures have steadily risen to the $50.96 billion spent in 2011.  How is that Americans are able to spend so much money on pets?  Why do Americans do this?  Do these households understand the opportunity costs?


Dave Tufte said...

Miz Ava: 94/100 for poor editing.

Are you trying to earn extra credit ;) We have 3 dogs, 3 cats, a hamster and a tarantula in our house (the last two don't live together).

I think it's also a cool piece of trivia that Utah is on the edge of a "dog treat zone". Who knew?

Anyway, I don't know why people spent so much on pets (we've got a dog who's needed a $2/day pill his whole life). But we do.

What I find really interesting is juxtaposing this post with the earlier one about how iPhone purchases might affect the national economy. Get this: the amount spent on pets is 4 times what they expect to be spent on iPhones. This makes me thing that JP Morgan (in that post) is really barking up the wrong tree.

Jake said...

I found this post very interesting. I researched why people “need” pets and found a list of 10 reasons: companionship, having a routine, exercise, less stress, getting out, making new friends, new interests, protection, taking care of something, and investing in life. These seem like valid reasons to own a pet. I can see how they are contributing to the demand for pets in the United States.

I grew up with pets in my house: dogs, cats, mice, and a chicken. Yes, I had a pet chicken. As I’ve aged a little since then, I’ve been against the idea of getting any type of pet mainly because I don’t want to deal with the mess, especially dog and cat hair. However, I experienced something this last weekend that has probably changed my mind about having some kind of pet in the future. My family went and stayed with one of my wife’s friends in Henderson, NV. This family has three small dogs. I have a little boy that is 15 months old, and I had never seen his face light up with so much excitement over dogs before this last weekend. He was very entertained and excited. At that moment, I realized that we would probably be buying a dog, or some other animal, in the future with a little influence from him and my other child. In my family, I think the demand for pets will change as my children get older and begin to ask us to buy a pet or pets. I believe that this is one of the factors that has affected the demand for pets in the U.S. As I look at the comment posted by Dr. Tufte, I wonder if his children have contributed to the “need” for pets in his family.

Dave Tufte said...

Jake ... there isn't much economics here you know. I think what you've experienced (and listed) is the shift variables for demand. These are things that influence our price-quantity tradeoff. In your case, the interest of your toddler has made you more likely to purchase a dog at a given price.

As to my family, no, our kids haven't contributed that much interest. Dogs was driven by my wife and I, who had 3 dogs together before we had kids. Our cats chose us. We're all allergic, but they live outside and take care of vermin. Our spider was a gift from Bill Heybourne in the Biology department. Now the hamster ... definitely the idea of my daughter and my wife.

BTW: Since I initially wrote that comment, the hamster died suddenly (diabetes). Students we know who are friends of the family quickly offered up their hamster, which they were having trouble taking care of, and which needed to be nursed back to health. My daughter and wife jumped at the chance to help another hamster after being unable to do much to help the first one. :)

Dave Tufte said...

Sorry Jake: 50/50.