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A Dynamic Bioeconomic Model of Ivory Trade: Details and Extended Results

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  • G. Cornelis van Kooten

Abstract

Trade in ivory is banned under CITES in an effort to protect the African elephant. The trade ban is supported by some range states, most notably Kenya, because they see the ban as an effective means for protecting a ‘flagship’ species, one that attracts tourists and foreign aid. It is opposed by some states, mainly in southern Africa, because their elephant populations are exceeding the capacity of local ecosystems with culling and other sources have resulted in the accumulation of large stocks of ivory. They argue that ivory trade will benefit elephant populations. The question of whether an ivory trade ban will protect elephant populations is addressed in this paper using a dynamic partial-equilibrium model that consists of four ivory exporting regions and a single demand region. Results indicate that a trade ban might not be successful in maintaining elephant populations, even if it leads to a stigma effect that reduces demand and increases the marginal costs of marketing ivory. The modeling results suggest that the species will survive only if the non-market value of elephants is taken into account. If rich countries compensate African range states according to marginal willingness to pay for elephants, optimal populations are lower than under an average payment, and, perhaps surprisingly, the interaction between tourism benefits and marginal compensation can lead to the demise of elephants in some regions where this would not occur otherwise. Finally, elephant populations are even projected to crash if range states can operate an effective quota scheme, even one that excludes poaching. Free trade in ivory and effective institutions that translate numbers of elephants into monetary payments may be the best hope for the elephant.

Suggested Citation

  • G. Cornelis van Kooten, 2006. "A Dynamic Bioeconomic Model of Ivory Trade: Details and Extended Results," Working Papers 2006-03, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
  • Handle: RePEc:rep:wpaper:2006-03
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    File URL: https://web.uvic.ca/~repa/publications/REPA%20working%20papers/WorkingPaper2006-03.pdf
    File Function: Final version, 2006
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    Citations

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    Cited by:

    1. van Kooten, G. Cornelis, 2006. "Protecting the African Elephant: A Dynamic Bioeconomic Model of Ivory Trade," 2006 Annual meeting, July 23-26, Long Beach, CA 21206, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Ferrier, Peyton Michael, 2008. "Illicit Agricultural Trade," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 37(2), October.
    3. Ferrier, Peyton Michael, 2009. "The Economics of Agricultural and Wildlife Smuggling," Economic Research Report 55951, United States Department of Agriculture, Economic Research Service.

    More about this item

    Keywords

    economics of elephant conservation; economics of ivory trade; trade bans; cartels and quota;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources
    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade

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