The Price Elasticity of African Elephant Poaching
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 commod...
| Main Authors: | , , , , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/358291518460602605/The-price-elasticity-of-African-elephant-poaching http://hdl.handle.net/10986/29369 |
| Summary: | 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. |
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