The Price Elasticity of African Elephant Poaching

47 Pages Posted: 14 Feb 2018 Last revised: 18 Mar 2020

See all articles by Quy-Toan Do

Quy-Toan Do

World Bank - Development Research Group (DECRG)

Andrei A. Levchenko

University of Michigan - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Lin Ma

National University of Singapore (NUS)

Julian Blanc

United Nations - Environment Programme (UNEP)

Holly Dublin

Independent

Tom Milliken

TRAFFIC

Date Written: February 12, 2018

Abstract

The objective of this paper is to provide an estimate of the elasticity of elephant poaching with respect to prices. Ivory being a storable commodity subjects its price to Hotelling's no-arbitrage condition, hence allowing identification of the supply curve. The price of gold, one of many commodities used as stores of value, is thus used as an instrument for ivory prices. The supply of illegal ivory is found to be price-inelastic with an elasticity of 0.4, with changes in consumer prices passing-through to prices faced by producers at a rate close to unity. Estimations based on a number of alternative estimation approaches all confirm the conclusion that supply is inelastic. The paper ends with a brief discussion on what such finding implies for elephant conservation policies.

Suggested Citation

Do, Quy Toan and Levchenko, Andrei A. and Ma, Lin and Blanc, Julian and Dublin, Holly and Milliken, Tom, The Price Elasticity of African Elephant Poaching (February 12, 2018). World Bank Policy Research Working Paper No. 8335. Available at SSRN: https://ssrn.com/abstract=3122824

Quy Toan Do (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

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Andrei A. Levchenko

University of Michigan - Department of Economics ( email )

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National Bureau of Economic Research (NBER) ( email )

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Centre for Economic Policy Research (CEPR) ( email )

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Lin Ma

National University of Singapore (NUS) ( email )

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Singapore

Julian Blanc

United Nations - Environment Programme (UNEP) ( email )

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Holly Dublin

Independent ( email )

No Address Available
United States

Tom Milliken

TRAFFIC

Cambridge
United Kingdom

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