An effort that animal rescuers began more than a decade ago to buy dogs for $5 or $10 apiece from commercial breeders has become a nationwide shadow market that today sees some rescuers, fueled by Internet fundraising, paying breeders $5,000 or more for a single dog.
The result is a river of rescue donations flowing from avowed dog saviors to the breeders, two groups that have long disparaged each other...
Bidders affiliated with 86 rescue and advocacy groups and shelters throughout the United States and Canada have spent $2.68 million buying 5,761 dogs and puppies from breeders since 2009 at the nation’s two government-regulated dog auctions, both in Missouri, according to invoices, checks and other documents The Washington Post obtained from an industry insider.What happens when well-meaning dog rescuers start to buy dogs direct from breeders, in order to rescue them and reduce the number of these dogs in the market? A simple demand-and-supply analysis has the answer, as shown in the diagram below. More buyers in the market leads to an increase in the demand for 'rescue dogs' (from D0 to D1), and increasing the price of these dogs (from P0 to P1). However, the real unintended consequence of the dog rescuers is that their actions actually increase the number of dogs traded (from Q0 to Q1). Dog breeders respond to incentives, and because the price has increased, they breed more dogs.
This is very similar to one of my favourite examples from earlier editions of my ECONS102 textbook, The Economics of Public Issues, on slave redemption in the Sudan (which I have posted on before). In this case (as in the case of slave redemption), the do-gooders seem completely oblivious to the unintended consequences of their actions:
Rescuers at the auctions say their purchases save individual dogs and weaken the commercial breeding chain by removing, spaying and neutering dogs that would otherwise be bred again and again. They say donors ranging from average dog lovers to show-dog breeders understand, and financially support, their efforts.The financial support of average dog lovers and show-dog breeders is part of the problem, not part of the solution! (Because it financially fuels the demand for these dogs). And the result is clear:
The majority of the $2.68 million The Post documented was spent since 2013 at Southwest Auction Service, the biggest commercial dog auction in the country, with some additional spending at its smaller, only remaining competitor, Heartland Sales...
“I’m not going to lie about this: Rescue generates about one-third, maybe even 40 percent of our income,” says Bob Hughes, Southwest’s owner. “It’s been big for 10 years.”...
Hank Grosenbacher, owner of Heartland, says rescuers usually account for 15 to 25 percent of his business.A little economic literacy would go a long way.
[HT: Marginal Revolution]