The economics of owning a pet

EAGLE WATCH

RAKUTEN Insights notes that the Philippines had the biggest pet ownership rate among Southeast Asian countries in 2021. Dog adoption appears to be the highest among pets in the country, as dogs serve as added security at home. The Philippine Canine Club, Inc. reported an estimated total of 10.8 million dogs in 2020, which eventually grew over 40 percent in 2021. This presented an opportunity for the US pet food market, as more and more Filipinos are drawn into acquiring pets, which seemed to have served as a coping mechanism among individuals, especially during the pandemic.

In 2021, the US Department of Agriculture reported a record-high dog and cat food exports and total pet food sales of $51 million and $434 million, respectively. These are expected to rise in the coming years, as more people get into pet owning, and pet owners spend more on quality pet food.

Despite the increased interest among local pet food manufacturers, most pure-breed pet owners still opt for imported pet food, which mostly originates from the United States, Thailand, and Europe. Purina Philippines, a brand that offers premium pet food, has stated that the pet food market is dominated by kibble brands selling at $2 per kilogram at most. The high demand for economy dr y dog food is due to its affordability and convenience. However, they believe that Filipino pet owners’ willingness to spend on premium food to meet their pets’ nutritional requirements is increasing.

Therefore, it is without a doubt that pet food is one expense that should not be cut back and must be taken into serious consideration before owning a pet. Whether it is dog kibble, cat food, or fish flakes, these cost money.

Another guaranteed expense in pet owning is medical care. Routine veterinary care is important to prevent any future problems with the pet’s health. During such visits, the veterinarian identifies issues that need to be addressed, which can be expensive. A recent survey conducted by Royal Canin, a French manufacturer of cat and dog food, revealed that only 20 percent of Filipino pet owners bring their pets to veterinarians at least once a year, while the remaining 80 percent bring their pets only when they are sick or would require immediate or special care. Pet owners, therefore, should be further educated on preventive healthcare and responsible practice of regular veterinarian visits even after their pet’s first year.

Apart from these regular expenses, pet owners also splurge on other petrelated purchases like pet toys, treats, cages, carriers, beds, accessories, and training sessions. Clearly, a pet’s life is no longer what it used to be. Dogs, for instance, are more than just for guarding the house. Nowadays, pets have all the privileges that humans do, and because they are part of the family, pet owners spare no expense in providing the best for their pets. According to Statista, 3 out of 10 Filipino pet owners spend at least P500 per month on their pets. This, of course, depends on how deep a pet owner’s love for their pets is, along with how deep their pockets are.

Although pet-related businesses and trends have been gaining attention lately, there remains to be hardly any sort of formal economic analysis involving the contribution of pets or pet owning in general. As posed by Endenburg, Hart, and Bouw (1994) in their work “Motives for Acquiring Companion Animals”, this is because pets are considered as an impulse buy and are, therefore, not subject to economic analysis.

However, there also seems to be a growing segment of pet owners among empty nesters, as well as young professionals who settle on either not having kids or postponing it. A study by Schwarz, Troyer, and Walker (2007) entitled “Animal House: Economics of Pets and the Household” suggests that children and pets tend to be substitutes as an increased number of children often lead to reduced pet spending among married households. The opposite can be observed among young professional couples who view pets as a cheaper alternative to having children.

Meanwhile, households with older children are also likely to own pets, showing evidence of complementarity between pets and children. The study also suggests that pets are considered as normal goods by households and are viewed as necessities rather than luxuries. Other household pet ownership and expenditure patterns in the study show rational economic behavior; therefore, applying the economic model of a household to recognize the contribution of pets may be worth exploring in the future.

Ultimately, it is important to keep in mind that pets rely only on their owners for their needs. Hence, proper planning and awareness of the financial implications of owning a pet should first be ascertained. As modern lifestyles foster household animals into society, with pets now being considered as additional family members, perhaps, the applicability of household economics to pet ownership decisions and expenditures should be further explored, as opportunities may emerge from understanding this type of consumption.