Monday, August 09, 2010

Cat Bubbles

For something to be a bubble its price probably has to increase faster than inflation. People have to believe that other people believe it will increase in price forever. This is the madness of crowds effect like tulip mania in the 1600's where the price of Tulips rose to ridiculous levels.

I have heard arguments recently about higher education in the US being a bubble. But what about Pets? Animal based bubbles have a long and fun history. For example Alpaca's and Ostriches twice have been bubble commodities.

There is a really interesting article on how spending has changed during the recession here. It presents this table



From these figures could pets also be a bubble? The cat has hardly changed in thousands of years. Certainly not enough of a recent efficiency increase to make it worth a 14.4% growth in costs. So keep an eye on the costs of pet ownership especially of the fancier breeds to see if bubble thinking comes along.