I believe that the question refers to domestic cats so I’ll confine my answer to that species of cat although the answer will be similar for other species. The first point to make is that not all domestic cats bury their poop all the time, in my experience. So we can’t generalise. This variation may be due to the enhanced confidence of cats who do not bury their poop, which in turn indicates very good cat caretaking.
There is a little bit of ambiguity and uncertainty among some experts on this subject. Although the most cogent and clearly reasoned answer to the question is provided by, as usual, Dr Desmond Morris. He writes:
The truth is that cats bury their faeces as a way of damping down their odour display.
This aspect of domestic cat behaviour is not a demonstration of the fastidious tidiness, and a concern for personal hygiene, of our feline companions.
Burying poop is the act of a subordinate creature in the household. In single cat homes cats are dominated by humans; their owners. There may also be cats outside the single cat home who make the cat anxious causing him to bury his poop, or dominant cats in multicat homes.
Cats owners dominate an important aspect of domestic cats’ lives, their food supply. This leaves domestic cats ‘in awe of us’ and therefore prone to burying poop. This is because among feral cats dominant toms tend to place their poop on ‘advertising hillocks’ where the odour can send the signal as far and as convincingly as possible that they are in charge. The more subdued cats bury their faeces. Burying faeces indicates an acceptance of subordination to dominant cats (and humans).
If they don’t bury their poop it suggests that they are more likely to see us as equals. If that theory is correct it is a sign of excellent cat guardianship. It is one of the duties of a cat ‘owner’ to boost the confidence of their cat so that they are more relaxed, more able to express their natural desires and motivations and as a consequence, content. To feel subordinate to a large animal in their home all their lives is not a pleasant thought for me.
The authors of The Domestic Cat: The Biology of its Behaviour, are less confident in their assessment as to the reasons for burying poop. They say that it is not clear that unburied poop are territorial markers (like spraying urine). Among feral cats, faeces are usually buried ‘near to the core of the home range but they may be exposed elsewhere’.
As cats sniff their buried poop the indication is that they are checking if it can be smelled by other cats (or humans as perceived as larger creatures). This supports Dr Morris’s argument.
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