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

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.