Most states have dog containment laws. In other words, your dog is not allowed to wander the neighborhood freely, knocking over trash cans and leaving presents on neighbors lawns. So, if you have a dog, you can get stake a long leash into the ground and hook your dog up to this every time he wants to go out. Or you can get a fence.

Of course, you have many more options than just your basic whit picket fence of yesteryear. Rather, you have the option of many different fences, including invisible fences (aka underground fences). The question is, what sort of fence is right for your yard?

Benefits and problems associated with chain link fences (I have chose chain link fences to represent all above ground fences, since they are generally the least expensive and most common):

A chain link fence does not just keep your dog in, it keeps other dogs (and children, etc.) out.
Some dogs can jump over chain link fences.
Other dogs might dig a hole beneath the fence to escape.
If you have a gate and forget to close it, your dog might escape.
Chain link fences are not generally though of as a beautiful addition to homes Rather, they are simply practical.
As far as fences go, a chain link fence is relatively inexpensive: generally, a 4 foot high galvanized chain link fence system will cost around $4 per lineal foot. A 6 foot high fence might cost about $11 per foot. Overall, your chain link fence will likely cost you more than a couple thousand dollars, depending on the size of your yard.
It is generally possible to get a colored chain link fence (although it will cost you more).
Some municipalities do not allow fences that are over a certain height.
You may need to have someone else install your fence.
There are few long term maintenance costs associated with a chain link fence.

Benefits and problems associated with invisible electric dog fences:

Some people believe that they are inhumane (this is up for debate: when used properly, your dog would not receive more than just a mild electric shock, similar to the shocks we receive from static electricity. It should be annoying, but not painful.)
You need to train your dog to use an underground fence you can simply set it up and expect it to work.
Underground fences are generally easy to install no, you do not need to dig up your entire yard.
Most invisible dog fences come with boundary flags (that can later be removed) to help your dog visually understand the boundaries it does not have to learn my simple trial and error! Also, many models come with a warning beep before the dog gets to the electric fence in this way, your dog can stop before he actually gets shocked.
Invisible fences do not ruin the overall appearance of your yard in fact, you cannot even tell that they are there.
You can use an invisible fence to surround your pool or garden or another area that you want to protect (or protect your dog from entering) without having to add an unsightly fence.
These invisible electric dog fences do not keep other dogs or humans out of your yard.
There is still the possibility that your dog could escape once past the boundary, there is nothing to stop your dog!
Most underground dog fence kits are priced lower than $300 there are actually quite a variety of prices, depending on what you want and what you need. It is possible to find an invisible dog fence kit that comes with 500 feet of wire for only $150 this is much cheaper than 500 feet of chain link fence!
Also, many electric dog fence systems come with 30 day money-back guarantees. In other words, if it does not work with your dog, you can return it.