The price elasticity of African elephant poaching

Quy-Toan Do, Andrei Levchenko, Lin Ma, Julian Blanc, Tom Milliken and Holly Dublin

No 8335, Policy Research Working Paper Series from The World Bank

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.

Date: 2018-02-12
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Related works:
Journal Article: The Price Elasticity of African Elephant Poaching (2021)
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