Dogs and Economics

by | November 6, 2023

I have a seven-year-old red Labrador retriever named Babu, and he has epilepsy.

Early this morning, Babu had a grand mal seizure. It was a bad one. For those who have never seen this kind of event, it is terrifying. Whether a human or a dog, the afflicted creature shakes violently and spasmodically, legs and arms akimbo and locked, foam spewing from the mouth, eyes rolling back. And when they emerge, often after minutes that feel like hours, it is into a fog of confusion. They don’t know who they are and where they are. And they don’t know who you are. For all of us who have lived our lives with dogs, the bond that develops is astonishing. Yet, coming out of such a seizure, the furry creature you live with, with whom you have an unshakeable bond, won’t know who you are.   

We adopted Babu when he was a year old, from a shelter in Wales in the UK. He has lived with us across large swaths of geography, from Europe to Wyoming to Princeton, and across even larger swaths of our life. I often think Babu has raised our two little girls as much as my wife and I did, teaching them about play, food, affection, jealousy, and mirth. Babu is the gentlest of souls, a 75-pound creature with a startlingly soft mouth who loves to lick anyone in sight and has the patience of Job. I could not count the number of times that babies and toddlers have put their hands in his mouth, pulled his tail, stepped on him, fallen on him and grabbed every part of him with glee – all to the same accepting, kind and telling canine reaction of a wagged tail.

When we met Babu, he had a faded red Bindi on his forehead, a legacy from his first Hindu family. The trauma of being abandoned had taken its toll. He was emaciated, his ribs showed, he hid under a table in a combination of fear and shyness, and he had a bald spot on his forehead where once a red dot blazed proudly. That Bindi became a metaphor for our dog’s journey back to life and inspired a children’s book called Babu’s Bindi. In time, his hair grew back, but only after my wife and I welcomed a baby into our family and Babu seemed to finally feel his pack was complete. Today, Babu’s coat is a deep red and his golden eyes often sparkle. The mix is ethereal, especially when the sun shines, and he seems to glow. Sometimes we will stare at each other, and I can feel my heart calming.

We humans like to apply science to mysteries. It is our way of making sense of the world, of marrying our innate curiosity and all that we don’t know. And when it comes to our dogs, we have learned that they give us unconditional love and emotional support, which helps us feel less lonely. Being around a dog lowers blood pressure and stress. Canines help us recover psychologically from a crisis, as many a service dog owner can attest.  They get humans to move more – studies have found that dog owners are for times more likely than non-dog owners to meet daily physical requirements. Dogs literally raise our levels of oxytocin, otherwise known as the love hormone.

What, might you be wondering does this have to do with economics?

At the macro level, economists and policy makers often talk about Gross Domestic Product (“GDP”), which measures the total value of finished goods and services within a nation’s borders. GDP has become the most relevant way of measuring how nation states, and even whole regions of the world, are doing.

GDP = Private Consumption + Gross Investment + Government Investment + (Exports-Imports)

Goods and services are, of course, a result of the work of individual people. And a person’s ability to work effectively is directly correlated to their well-being. Anxiety and depression result in reduced productivity and higher healthcare costs. Studies have shown that the economic burden of poor mental health can, globally, lead to around a 15% reduction in total disability adjusted life years of working-age people, representing a loss of approximately $5 trillion in economic output. Such losses can account, on a regional basis, for a reduction of around 5% of domestic product in developing countries and 8% in advanced economies. 

Depression and anxiety have extremely significant negative economic implications for both a person and a country.  And study after study has empirically demonstrated that dogs make people happier, and implicitly more productive. Globally, pet ownership increases overall happiness by more than 22%. 

Put simply, dogs are good economics. 

There is a cartoon I once saw where a dog has died and gone to heaven. He is being addressed by what seems to be God, who reaches down to take off his collar and place it above his head, where it floats like a halo. The comment says, “It is easy with you dogs…you are practically angels already.” 

I thought about this when I held Babu early this morning, as he came out of his seizure. The clouds in his eyes receded, replaced by recognition. People think dogs can’t smile, but this is not true. A dog’s smile is as beautiful as sunrise. And I got to see it.


About the Author

Alex is the co-founder of Jackson Hole Economics, a non-profit research organization which provides analysis of key topics in the political economy, and develops actionable ideas for how sustainable growth can be achieved

Alex is also the co-founder and Chief Executive Officer of Novata, a mission-driven and technology-powered public benefit corporation designed to improve the process of Environmental, Social, and Governance (ESG) diligence in the private markets. Backed by a unique consortium, which includes the Ford Foundation, S&P Global, Hamilton Lane and Omidyar Network, Novata has created an independent, unbiased and flexible platform for the private markets to more consistently measure, analyze and report on relevant ESG data.

With two decades of experience in the financial and non-profit spaces, Alex has led a number of sustainable growth and transformation efforts. He is a former CEO of GAM Holdings and Chief Investment Officer of UBS, and also served as the Chief Financial Officer of the Bill & Melinda Gates Foundation, where he created the foundation's strategic investment fund.

Alex was a White House Fellow and an assistant to the Secretary of Defense. He is a member of the Board of Directors of Franklin Resources, Inc. (Franklin Templeton), a member of the Council on Foreign Relations, Chair of the Advisory Board of Project Syndicate and a board member of the American Alpine Club. Alex also writes regularly for various news outlets and is the author of Babu's Bindi and The Big Thing: Brave Bea, both children's books.

Alex holds a JD from Columbia Law School, where he was a Harlan Fiske Stone Scholar, an MBA from Columbia Business School, and a BA from Princeton University.

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