Naked Economics: Undressing the Dismal Science pdfdrive com

local citizens somehow share the profits from this tourism, then the local
population has a large incentive to keep such animals alive. This has worked in
places like Costa Rica, a country that has protected its rain forests and other
ecological features by setting aside more than 25 percent of the country as
national parks. Tourism currently generates over $1 billion in annual revenue,
accounting for 11 percent of the national income.
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Sadly, this process is working in reverse at the moment with the mountain
gorilla, another seriously endangered species (made famous by Dian Fossey,

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author of Gorillas in the Mist). It is estimated that only 620 mountain gorillas are
left in the dense jungles of East Africa. But the countries that make up this
region—Uganda, Rwanda, Burundi, and Congo—are embroiled in a series of
civil wars that have devastated the tourism trade. In the past, local inhabitants
have preserved the gorillas’ habitat not because they have any great respect for
the mountain gorilla, but because they can make more money from tourists than
they can by chopping down the forests that make up the gorillas’ habitat. That
has changed as the violence in the region grinds on. One local man told the New
York Times, “[The gorillas] are important when they bring in tourists. If not, they
are not. If the tourists don’t come, we will try our luck in the forest. Before this,
we were good timber cutters.”
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Meanwhile, conservation officials are experimenting with another idea that is
about as basic as economics can be. Black rhinos are killed because their horns
fetch a princely sum. If there is no horn, then presumably there is no reason to
poach the animals. Thus, some conservation officials have begun to capture
black rhinos, saw off their horns, and then release the animals back into the wild.
The rhinos are left mildly disadvantaged relative to some of their predators, but
they are less likely to be hunted down by their most deadly enemy, man. Has it
worked? The evidence is mixed. In some cases, poachers have continued to kill
dehorned rhinos, for a number of possible reasons. Killing the animals without
horns saves the poachers from wasting time tracking the same animal again.
Also, there is some money to be made from removing and selling even the stump
of the horn. And, sadly, dead rhinos, even without horns, make the species more
endangered, which drives up the value of existing horn stocks.
All of this ignores the demand side of the equation. Should we allow trade in
products made from endangered species? Most would say no. Making rhino-
horn daggers illegal in countries like the United States lowers the overall
demand, which diminishes the incentive for poachers to hunt down the animals.
At the same time, there is a credible dissenting view. Some conservation
officials argue that selling a limited amount of rhino horn (or ivory, in the case
of elephants) that has been legally stockpiled would have two beneficial effects.
First, it would raise money to help strapped governments pay for antipoaching
efforts. Second, it would lower the market price for these illicit items and
therefore diminish the incentive to poach the animals.
As with any complex policy issue, there is no right answer, but there are some
ways of approaching the problem that are more fruitful than others. The point is
that protecting the black rhino is at least as much about economics as it is about
science. We know how the black rhino breeds, what it eats, where it lives. What
we need to figure out is how to stop human beings from shooting them. That

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requires an understanding of how humans behave, not black rhinos.
Incentives matter. When we are paid on commission, we work harder; if the
price of gasoline goes up, we drive less; if my three-year-old daughter learns that
she will get an Oreo if she cries while I’m talking on the phone, then she will cry
while I am talking on the phone. This was one of Adam Smith’s insights in The