The price elasticity of African elephant poaching

This paper estimates the elasticity of elephant poaching with respect to prices. To identify the supply curve, the authors observe that ivory is a storable commodity and hence subject to Hotelling's no-arbitrage condition. 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. The paper briefly discusses what an inelastic supply implies for elephant conservation policies.

Attachment(s):