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Is a pet right for you? How an ethical dilemma and personal finance address this question

Updated: Nov 21, 2023

Is a pet right for you? How an ethical dilemma and personal finance addresses this question

This article describes and operationalizes the ethical dilemma known as The Trolley Problem. We demonstrate how, like a Salvador Dali painting, The Trolley Problem persists over time. We show why this ethical dilemma, via the economic and moral philosophy teachings of Adam Smith, was just as relevant before the American Revolution as it is today. We reveal how The Trolley Problem relates to reasoning errors, cognitive biases, and our neurobiology. As a practical application, The Trolley Problem helps us explore our modern relationship with pets. An ethical framework is provided to help someone evaluate a pet acquisition. Finally, personal finance pet purchase considerations and decision tools are suggested.

Please note - this article explores ethical and financial considerations for pet ownership. Pet lovers may find this article provocative.

About the author: Jeff Hulett is a career banker, data scientist, behavioral economist, and choice architect. Jeff has held banking and consulting leadership roles at Wells Fargo, Citibank, KPMG, and IBM. Today, Jeff is an executive with the Definitive Companies. He teaches personal finance at James Madison University and provides personal finance seminars. Check out his new book -- Making Choices, Making Money: Your Guide to Making Confident Financial Decisions -- at

Author animal disclosure: The author grew up in a middle-class American home with lovely cat and dog pets as a regular part of family life. The author also experienced farm life on his uncle's farm one month a year for summer break. On the farm, animals were treated in a more utilitarian manner. The author experienced situations when animals were put to sleep in a manner consistent with the farm's utilitarian purpose.

Table of Contents

  1. Summary and Introduction

  2. The Trolley Problem and Adam Smith

  3. Reasoning, cognitive bias, and the neurobiological building blocks for The Trolley Problem

  4. The Trolley Problem and pets

  5. The Trolley Problem and Adam Smith, again

  6. Connecting the pet decision to personal finance

  7. Resources, Choice Architecture, and Definitive Choice

  8. Notes

2. The Trolley Problem and Adam Smith

The Trolley Problem [i] is a series of thought experiments in ethics and psychology, involving stylized ethical dilemmas of whether to sacrifice one person to save a more significant number. The series usually begins with a scenario in which a runaway tram or trolley is on course to collide with and kill a number of people down the track, but a driver or bystander can intervene and divert the vehicle to kill just one person on a different track. The Trolley Problem involves a two-way trade of conscience between:

  1. The number of people harmed in the different trolley scenarios, and

  2. The degree of decision agency of the person with significant influence over each trolley scenario's outcome.

The Trolley Problem

Decision Agency vs. Decision Outcome

The Trolley Problem Decision agency v Decision Outcome

There is a runaway trolley barreling down the railway tracks. Ahead, on the tracks, five people are tied up and unable to move. The trolley is headed straight for them. You are standing some distance off in the train yard, next to a lever. If you pull this lever, the trolley will switch to a different set of tracks. However, you notice that there is one person on the sidetrack. You have two (and only two) options:

  1. Do nothing, in which case the trolley will kill the five people on the main track.

  2. Pull the lever, diverting the trolley onto the side track where it will kill one person.

Which is the more ethical option? Or, more simply: What is the right thing to do?

In terms of decision outcomes, our motivation is straightforward. Helping more people off the train track is better than helping less. However, our decision agency is deceivingly complex. Decision agency involves how we reason and it includes naturally occurring cognitive biases. These are both expressed by how our neurobiology functions. The next few sections build an understanding of how we achieve decision agency.  This decision agency architecture is provided in the service of making The Trolley Problem ethical trade-offs. As will become clear, these ethical tradeoff decisions are intensely personal to the individual, couple, or intimate group that must share in the decision outcome. For example, parents, with the input of their children, are responsible for making the decision about a family pet.

Adam Smith - In the mid-1700s, a congruent question to The Trolley Problem was posed by Adam Smith in a famous passage from his book, The Theory of Moral Sentiments. Smith asks what would happen if a “man of humanity in Europe” heard that there had been a terrible earthquake in distant China, which killed “a hundred million of his brethren.” Smith imagined that the man would express genuine sorrow that this had happened, and reflect upon “the precariousness of human life, and the vanity of the labours of man, which could thus be annihilated in a moment.

The essential point is that The Trolley Problem persists over time. Regardless of whether we find ourselves in the 2000s, the 1700s, or other times, The Trolley Problem-based behavior is part of our default genetic wiring and the human condition. As a genetic default, the wiring is only changeable by human evolution. Natural selection processes are very slow, taking multiple millennia for lasting changes to how our genetics are expressed. If we act contrary to our genetic default, it is because we trained ourselves to overcome our nature. Even with training, the genetic wiring still exists. Next, we explore the essential elements of our reasoning and neurobiology that help us solve The Trolley Problem.

Further along in this article, Smith's version of The Trolley Problem is explored in the context of the "Impartial Spectator" and the relationship with our pets.

3. Reasoning, cognitive bias, and the neurobiological building blocks for the Trolley Problem

Reasoning: There are two categories of reasoning errors.

  • An Error of Commission ("EoC"), and

  • An Error of Omission ("EoO").

Errors of commission are often easier to identify because our sense of justice draws our attention to uncover EoCs. These are factual errors that can either be by mistake or by design. For example:

  • You go on a date with someone you don’t really like and have a bad time, or worse, married someone and it didn’t end up working out.

  • A politician is fact-checked and said to have made factual errors.

Our sense of justice spurs us to learn whether the EoC was done by mistake or with full knowledge. For example, were there warning signs that the relationship would not work out? Or was I deceived? Alternatively, did the politician knowingly make the mistake in order to win votes or was it an honest error? Also, in some cases, we hold people to a higher standard. The "known or should have known" legal standard [ii] suggests that regardless of the reason for an EoC, we hold some people to the same standard. This means that the expectation is that they "knew or should have known" that a mistake occurred, so the punishment will be the same regardless of a person's error reason.

Because EoCs are easier to identify than errors of omission, many decision-makers try to avoid making errors of commission by doing nothing. Although this increases their chances of making an error of omission, these errors are harder to detect. [iii]

Errors of Omission are different. Because they are "omitted" these errors are much less transparent to those harmed by the EoO. Some examples include:

Medical errors of omission include a doctor’s failure to:

  • Thoroughly evaluate a patient

  • Tell a patient about a vaccine that might save their life

  • Order necessary imaging, blood work, or any diagnostic testing to reach a diagnosis

  • Perform a necessary procedure or operate on a patient

  • Prescribe drugs that are critical to stabilize a patient or improve their condition

In politics, errors of omission are commonplace. To build some context, the blockbuster 1982 Musical "The Best Little Whorehouse In Texas" provides insight. The Texas governor, played by the late actor Charles Durning, declares in song how he applies EoOs in his political life.

"Ooh I love to dance a little sidestep, now they see me now they don't - I've come and gone and,

ooh I love to sweep around the wide step, cut a little swathe and lead the people on."

Let's say a politician wishes to implement a new policy as per their political party's agenda. Also, let's say there are 5 important criteria for that policy impacting the effectiveness of the policy. Some criteria will positively impact the policy's success and some criteria will negatively impact the policy's success. When debating or otherwise persuading others, the politician will focus on the criteria SUPPORTING the policy's success and will downplay or ignore the criteria CONTRARY to the policy's success. Notice, technically, the politician has not told a lie (or an EoC), they have simply not told the whole truth. (or an EoO) In the realm of political rhetoric, people tend to be more tolerant of and more easily swayed by EoOs than EoCs.

Cognitive Bias - The reasoning errors, EoC and EoO, are related to a naturally occurring cognitive bias called confirmation bias. Confirmation bias is the tendency of our minds to seek out information that supports the beliefs already held. It also leads people to interpret evidence in ways that support their pre-existing beliefs, expectations, or hypotheses. Though such evidence of confirmation bias has appeared in psychological literature throughout history, the term ‘confirmation bias’ was first used in a 1977 paper detailing an experimental study on the topic. [iv]

As another political example, please consider the highly sensitive matter of the January 6, 2021 storming of the U.S. Capitol. This attack certainly appears to have elements impacted by confirmation bias. There was a group of Americans who stormed the U.S. Capitol which resulted in the death of other Americans. The storming group appeared to be motivated by information apparently confirming a held belief about the American Government and its recently defeated president. As stated in the U.S. congressional committee investigation report: [v]

“The Committee’s investigation has identified many individuals involved in January 6th who were provoked to act by false information about the 2020 election repeatedly reinforced by legacy and social media.”

In the context of reasoning errors, the attack was motivated by very deadly elements from both EoOs and EoCs.

Confirmation Bias

Neurobiology and attention - Confirmation bias is a feature of our neurobiology. [vi] There is an almost infinite amount of data available in the world available for people to process. Our brains naturally reduce our attention information set. This filtering process enables us to attend to the data most important for our brains to process. While there may be millions or more pieces of environmentally available data, we will only attend to the much smaller set of attention-filtered data.

Our attention is a kind of biological protector for our brain. If all sensory inputs were evenly weighted, our brains would literally melt down after being drowned in sensory information. Confirmation bias is the protective filtering byproduct. Think of confirmation bias as a powerful attention attractor resident in the total available data space. It is like a black hole. The confirmation bias attention "well" is difficult to escape if you get too close! Our attention starting point is that previously held beliefs are correct. Even if there is significant counter-evidence suggesting it is not correct today.

confirmation bias attention black hole

Now, let's connect our neurobiological-based operations to The Trolley Problem. Our beliefs are formed from how we reason and how our neurobiology is engineered to protect our brains. Reasoning errors (EoC and EoO) and cognitive biases (confirmation bias) are features of our neurobiology. Thus, our ethical responses favor attending to ourselves and our held beliefs. This is more likely than attending to those in unseen, faraway places. This is our brain's DEFAULT SETTING. Also, we are more likely to perform an EoO (the trolley was already heading down the track toward those people) than an EoC. (actively switching the trolley to kill a person) Thus, our ethical responses are naturally more likely to attend to an EoC (I do not want to switch the track to kill someone) than to naturally allow an EoO (I am more willing to stand by and do nothing). These are our brain's DEFAULT SETTINGS. Our nature to allow more people to die in the EoO case does not make it correct. It does mean that if we believe that saving more people is better than saving fewer people, then we need to overcome our brain's default wiring.

4. The Trolley Problem and pets

Next, a modern-day twist on The Trolley Problem is provided. In 2023, according to a Forbes Magazine article, there are about 87 million pet owners in the U.S. According to the ASPCA, the average pet owner spends nearly $1,400 annually on their furry pal. Thus, the total estimated annual cost of pet care is a whopping $122 Billion.

To start... essential to resolving an ethical dilemma like The Trolley Problem is to understand our core motivation. In this case, the question is - "Why do we like pets?"

The answer, according to Psychology Today, relates to the emotional support people are provided by their pets. The summary reasons are:

  1. Pets attend potently to our brain's social circuitry.

  2. Pets are pure. The pets' innocence is inspiring.

  3. Pets only know and breathe connection.

In short, pets provide their owners emotional support in exchange for the pet being cared for by the owner.

According to Action Against Hunger, approximately 783 million people go hungry worldwide.

So, the modern Trolley Problem is this:

"If you have a choice between taking care of your pet or taking the same resources and saving a portion of the 783 million people that go hungry today, which would you choose? What do you think is the right thing to do?"

Given the spending on pet care today, the de facto answer to this question is clear. On average, people are MUCH MORE LIKELY to spend money on Fluffy's pet care than preventing people's starvation in an unseen land. Fluffy's pet care is equivalent to the pet owner's emotional support. Walking away from habituated emotional support is no easy task.

Your response may be "Wait, I do both, I give to charities AND I take care of my pet!" The challenge with this response is that payments for the charities and the pet occur as a marginal opportunity cost. Today, 783 million people are going hungry at the margin. Thus, the opportunity cost of a marginal dollar spent on Fluffy's care is a dollar not spent on the 783 million people going hungry. If saving people is more important than saving pets, a logical extension of the marginal analysis is to not spend money on pet care until human starvation and hunger have been eliminated.

By the way, if the $122 Billion annual U.S. spending on pet care was diverted to solving hunger, every hungry person in the world would receive $155 a year. In the developing world, this would provide a staggering amount of resources to help resolve hunger and poverty.

The trolley question leaves us with this ethical question:

"Is the emotional benefit I receive from my pet worth the starvation and undernourishment of other people?"

Today, the answer is clear. For many, the pet trolly is not switched off the track. The funding provided for pet care could have been diverted to people in order to prevent undernourishment or starvation. People are voting with their pocketbooks. Clearly, the pets have won the vote.

A more nuanced question is:

“Are there less expensive emotional support alternatives that provide similar emotional benefits as our pets?"

Perhaps there is a way to move the needle on hunger AND receive emotional support without the cost associated with pet ownership. To be fair, for some people, pets may be the only way to receive the emotional support they need. But given the long-term expense and opportunity cost, for the majority of people, a less expensive alternative could be considered.

According to Verified Market Research, an industry market research company, global online therapy services are projected to grow from a $2.6 Billion market in 2021 to an $8.3 Billion market in 2030. Clearly, pet-alternative emotional support is growing. The remaining open question is whether online therapy is a pet emotional support substitute. The benefit of online therapy, compared to pets, is that online therapy only lasts as long as emotional support is needed. Generally, pets are kept for their entire lives, regardless of the degree to which the pet provides emotional support over their life. Let's say that the $8.3 Billion market projection by 2030 is a necessary amount to provide Americans needed emotional support. That still leaves 93% of the resources available to be used to address starvation and undernourishment. [vii]

5. The Trolley Problem and Adam Smith, again

Circling back to Adams Smith's version of The Trolley Problem, Smith suggests the people of Europe would ultimately sacrifice their "little finger" for the "hundred million of his brethren" in China. This results from the comparison of our actions to what Smith calls the "Impartial Spectator." [viii] This is like an independent consciousness that we desire to impress and seek their approval. Think of the impartial spectator as an aggregation of all the people we do not want to disappoint. So Smith suggests, paradoxically, that it is our selfish desire to look good to the impartial spectator that drives us to act selflessly. [ix] As Smith writes in the Theory of Moral Sentiment, "It is a stronger love, a more powerful affection, which generally takes place upon such occasions; the love of what is honourable and noble, of the grandeur, and dignity, and superiority of our own characters."

However, in the case of the pet, Smith's impartial spectator does not provide a strong enough disapprobation to overcome a pet owner's emotional ties to their pet. In this case, the majority of people's impartial spectators do not interrupt their willingness to trade human starvation for pet care. Apparently, the emotional support of our pets is just too strong to overcome.

6. Connecting the pet decision to personal finance

In the context of personal finance, our "payment hierarchy" is an essential consideration when thinking about pets or other long-term financial commitments. A pet is like a fixed expense - such as a car loan, a mortgage, or other contractual debts. In my book, we discuss the need to "pay yourself first." Attention to your payment hierarchy helps you avoid a well-intended expense devolving into what behavioral economists call "sludge." [x] In the context of the pet, the challenge is to properly categorize the animal as:

  1. an investment,

  2. a need-based expense,

  3. or a want.

Getting the payment hierarchy correct and operationalized is essential to long-term personal finance success. Also, implementation enablers called "commitment devices" help ensure your payment hierarchy compliance.

Depending on where the pet falls, will drive the decision process and long-term outcomes. Next, we discuss the challenge of categorizing the pet's utility and then the financial implications of the pet acquisition.

The challenge is forecasting your utility over the likely expense time period. Let's assume a pet is a twelve-year commitment. Are the emotional benefits you and your family will receive worth the long-term costs? Let's face it, a fluffy puppy is as cute as a button. Next are some utility-clarifying questions:

  • Can you imagine that puppy as a full-grown dog?

  • What about your family? As they grow and change, are they likely to achieve the same benefits they receive today?

  • What is the benefit of the pet's emotional support to you and your family? Are there alternatives for that emotional support?

  • Are you committed to paying the long-term costs (money and time) to care for the pet?

  • Finally, how are those benefits prioritized relative to the funding substitutes? - like providing more resources to resolve hunger or providing for your own retirement?

While forecasting our utility is challenging, forecasting the cost impact is achievable with a simple model. We know average pet costs are $1,400 per year. We also know the average age of a dog is 12 years. Let's say you acquire a pet in your early-to-mid 20s. In this example, we will assume you will keep the pet for its full average life. Also, we will assume some people will like pet ownership so much, that they will buy a second pet for an additional 12 years in the mid-to-late 30s. So we have 2 scenarios: a "1 Dog" for 12 years scenario and a "2 Dog" for 24 years scenario.

This graph shows the opportunity cost of diverting the pet ownership costs from retirement savings. This is NOT to suggest this is what a human life is worth as in The Trolley Problem ethical dilemma. The point is to put a hard value number on the pet ownership trade. Whether you use these resources to solve world hunger, your own retirement, or pet ownership is left up to you!

The assumptions for our simple model are that the $1,400 / year cash flows are invested in investment funds receiving an annual return of 10% over the pet owner's life. This is based on the two 12 or 24-year pet ownership scenarios. Retirement is assumed at 65 years old. Thus, in the 2 dog scenarios, the opportunity cost of pet ownership is:

So, in round numbers, the lifetime cost of a pet is about $1 million. To be clear, this does NOT include the indirect costs of your time to care for the pet. The modeled costs are food, medical care, and other direct costs. This should help you make the tradeoff decisions for your own utility and benefits. Also, notice the relatively small difference between the 1 and 2 Dogs scenarios. This is owing to the convex nature of the time value of money. The bottom line is that the beginning of any cash flow stream over time is weighted much higher. [xi]

Is the $1 million worth it?

  • Is the $1 million worth, diverting the funds from those people that could be helped to reduce their hunger?

  • Is the $1 million worth, reducing your own optionality for retirement or other long-term goals?

  • Would the $1 million pay for emotional support from therapists and still provide a significant portion for retirement?

It is up to you!

More information about the pet decision in the context of personal finance is provided here:

7. Resources, Choice Architecture and Definitive Choice

Definitive Choice is an app decision solution to help you understand your self-interests and actions on almost all life decisions. The app can help you and your family buy a pet or consider other alternatives.

It provides a straightforward user experience. The number-crunching occurs in the background by time-tested decision science algorithms. It uses a proprietary "Decision 6(tm)" approach that organizes the preference criteria (what is important to you?) and alternatives (what are the choices?) in a series of bite-size ranking decisions. Since it is on your smartphone, you can use it while you are curating data to support the decision. It is like having a decision expert in your pocket. The results dashboard provides a rank-ordered list of recommended "best choices," tailored to your preferences.

Also, Definitive Choice comes pre-loaded with many decision templates. You will want to customize your own preferences (aka criteria) and alternatives, but the preloaded templates provide a nice starting point.

Using decision process solutions enables DECISION A-C-T:

  • Accelerated: faster, less costly decisions. It enables a nimble decision environment.

  • Confidence-inspired: process causes people to be more confident in the decision, increasing buy-in, and decision up-take.

  • Transparency-enabled: reporting, documentation, and charts to help communicate the decision.

8. Notes

[i] Thomson, The Trolley Problem, The Yale Law Journal, 94(6), 1395–1415, 1985

[ii] Editors, 13 CFR § 142.6 - What does the phrase “know or have reason to know” mean? Legal Information Institute, Cornell Law School, accessed 2023

[iii] Ackoff, Gharajedaghi, Reflections on Systems and Their Models, Systems Research 13 (1): 13–23, 1996.

[iv] Mynatt, Doherty, Tweney, Confirmation bias in a simulated research environment: An experimental study of scientific inference, The Quarterly Journal of Experimental Psychology, 29(1), 85–95, 1977

[vi] Hulett, How we learn is how we discriminate, The Curiosity Vine, 2023

[vii] 93% resource availability to address starvation and undernourishment = 1 - ($8.3B 2030 online therapy services / $122 B in money spent on pets today)


93% = 1 - (8.3 B / $122 B)

There will likely be a leakage between making the money available from pet care and making it available to the hungry, but it is certainly a significant starting point.

[viii] Smith, The Theory of Moral Sentiments, 1759

Munger, Adam Smith Discovered (and Solved!) the Trolley Problem, American Institute for Economic Research, 2023

[ix] Self-interests are complex. A common misperception is that 'self-interest' is a synonym for 'selfishness.' It is not. Selfish or selfless motivations are found along a continuum. This continuum describes a fulsome set of an individual's self-interests.


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