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Nov
12
2009

Kitten demand exceeds supply

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November 12, 2009

So says this newspaper story.

Does this suggest to anyone else that the price of kittens needs to increase?  Why?

  1. By setting the equilibrium price we ensure that only those with the highest willingness to pay for a kitten receive a kitten.
  2. By increasing the price  to its equilibrium level we ensure that we have the right relative price signal in terms of the allocation of SPCA animals.  As a result, this ensures that relatively more “less desirable” animals find homes – and that the relative allocation of animals is efficient.

About the author

Matt Nolan

Matt Nolan is an economist at Infometrics (although the opinions expressed are independent of the organisation) . Email: nolan.matt@gmail.com; matt@infometrics.co.nz. Work phone: 04-496-5290

Permanent link to this article: http://www.tvhe.co.nz/2009/11/12/kitten-demand-exceeds-supply/

8 comments

1 ping

  1. Kris - the gift basket specialist says:

    November 12, 2009 at 8:53 am (UTC 12 )

    I agree, only people who can take care of an animal deserve an animal. The price of a cat might need to be more in order to find GOOD homes for pets. We dont want there to be too many cats or they will all be ill treated. With less of a supply cats will be more treasured. Just a view.

  2. fibby says:

    November 12, 2009 at 1:27 pm (UTC 12 )

    The article suggests there is no shortage of kittens, only of kittens old enough to be adopted. By allowing people to pay for their too-young kittens in advance, the SPCA could create a futures market for kittens, allowing some of the excess demand pressure to be diverted into the futures curve. Then the spot price would only have to respond to demand from the most impatient consumers, potentially meaning a less volatile adjustment.

  3. Bill Bennett says:

    November 12, 2009 at 8:30 pm (UTC 12 )

    My immediate neighbourhood has a surfeit of cats. They continually battle with each other in order to gain access to resources. Would a feline economist be available to design an optimal allocation or shall we just leave it to market forces?

  4. Dismalsoyanz says:

    November 13, 2009 at 9:45 am (UTC 12 )

    @fibby

    I think rather than a forward price per se, an option market would be better [yes - I know an option is just a bundle of forwards but try explaining that to your average feline fancier]. Sell to prospective buyers a call option to buy a kitten at a predetermined price.

  5. fibby says:

    November 13, 2009 at 10:49 am (UTC 12 )

    That’s just fabulous, I love it!

  6. Freeview Recorder says:

    November 14, 2009 at 12:07 am (UTC 12 )

    If you increase the price of kittens you face the danger of creating a kitten ‘black market’ and all the dangers that poses – for example are you willing to pay an increase in taxes for extra police patrols to catch kitten kidnappers ?

  7. Minneapolis Duct Cleaning says:

    November 14, 2009 at 1:55 am (UTC 12 )

    That might work well in your country, but here in Minneapolis, MN $50 to a retired person is way more money than $200 to a working couple.

  8. Mindy says:

    November 18, 2009 at 12:16 pm (UTC 12 )

    haha this is so funny. I was just joking with a friend how I wanted a kitten but hated cats and would have it killed if it reached the age (sick humor I know.)

  1. Did you see the one about . . . « Homepaddock says:

    November 16, 2009 at 8:58 am (UTC 12 )

    [...] Kitten demand exceeds supply – The Visible Hand applies economic theory to the pet market. [...]

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