Me On Marketplace

I’m on today’s edition of the NPR radio show Marketplace Money (transcript; audio ~25:30 to 29:00):

The average dog owner spends $655 a year on health care, that’s up 50 percent from a decade ago. Cat owners are in for $644, up nearly 75 percent, close to how much our health care costs have risen by. And that’s a puzzle to economists, like Robin Hanson at George Mason University.

Robin Hanson: Everyone’s got a favorite villain or bugaboo about why human health care costs are increasing; it’s too much regulation, too much government involvement, too much third-party payment.

Too many malpractice lawsuits. None of these factors apply to pets. You can’t blame insurers for pushing up costs either. Pet insurance is rare; only 1 percent of pet owners in this country have it. The 99 percent are paying full freight.

Hanson: But in pet medicine, people put their money on the barrel head. And yet pet expenses are increasing nearly as fast as human expenses.

What gives? Hanson and other economists give two explanations. Explanation one: Love. We treat our pets like family. They eat our food, they sleep in our beds, they relax at the spa, they have Facebook accounts. Of course we’re going to pay for their health care. Take dogs.

Hanson: So we want to show loyalty to these dogs who are showing loyalty to us. One way to do that is to spend more on medicine for them.

Explanation two for the rising cost has nothing to do with your pets; it’s how we see ourselves.

Hanson: We compare ourselves to people around us. And we ask the doctor and they say well, lots of people do this, most people do this, and the bar has been raised on how much you need to spend on your pets to show you’re a caring pet owner.

In the interview I tried to pose the choice as supply vs. demand explanations, as I’ve done in my last two posts, but I guess they didn’t find as engaging.

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