Economics

Read the case study on page 27 "Protecting Endangered Species with Private Property Rights." Write an essay 1,000-1,250 words, answering the following questions:

1. Economists argue that scarcity is different than poverty. To understand why many wild animals are scarce we need to look at scarcity in the context of private property. Explain how scarcity is affected by private property rights in the case study.

2. Compare and contrast how incentives accompanying private property rights can both help protect and endanger the rhino, an endangered species.

Be sure to cite at least three relevant scholarly sources in support of your content. These sources can include trade journals and think tank reports.

Case study....

Protecting Endangered Species with Private Property Rights.

Have you ever wondered why the wild tiger is endangered in much of the world but most cats are thriving? Or why spotted owls are threatened in the Pacific Northwest but chickens are not? Why have elephant and rhinoceros' populations declined in number but not cattle or hogs? The incentives accompanying private ownership provide the answer. To understand why many wild animals are scarce, consider what happens with animals that provide food, most of which are privately owned. Suppose that people decided to eat less beef. Beef prices would fall, and the incentive for individuals to dedicate land and other resources to raise cattle would decline. The result would be fewer cows. The market demand for beef creates the incentive for suppliers to maintain herds of cattle and to protect them under a system of private ownership. In some ways, the rhinoceros is similar to a cow. A rhino, like a large bull in a cattle herd, may charge if disturbed. At 3,000 pounds, a charging rhino can be very dangerous to humans. Also like cattle, rhinos can be valuable to people-a single horn from a black rhino, used for artistic carvings and medicines, can sell for up to $30,000. But when hunting rhinos and selling their horns is illegal, rhinos become a favorite target of poachers-people who hunt illegally. Poachers are sometimes even assisted by local people eager to see fewer rhinos present because rhinos make life risky for humans and they also compete for food and water. However, rhinos are very different from cattle in one important respect: in most of Africa where they naturally range, private ownership of the rhino is prohibited. Since 1977, many nations have outlawed rhino hunting and forbidden the sale of rhino parts. But this approach has only made things worse for the rhino: between 1970 and 1994, the number of black rhinos declined by 95%.

1. According to South African economist Michael 't Sas-Rolfes, the trade ban "has not had a discernible effect on rhino numbers and does not seem to have stopped the trade in rhino horn. If anything, the . . . listings led to a sharp increase in the black market price of rhino horn, which simply fueled further poaching and encouraged speculative stockpiling of horn." But what if the powerful incentives created by private ownership were instead brought to bear on the rhino? That actually happened for a while in Zimbabwe. Landowners were allowed to fence and manage game animals on their property. Because they could profit from protecting the big animals, some ranchers shifted their operations from producing cattle to wildlife protection, ecotourism, and hunting, often in cooperation with neighboring landowners. Under these rules, the black rhino population climbed dramatically. And because ranchers were allowed to cooperate and combine operations, they could reduce fencing between ranches and manage the larger preserves as a unit, better helping not only rhinos but other valued wildlife as well. Indeed, several parts of southern Africa have a tradition, extending back to the 1960s, of allowing ownership of wildlife. Namibia, for example, gave those rights to private landholders in the 1960s and extended them to communal lands in the mid-1990s. With this policy change, tribal communities began to hold ownership rights over the wildlife in their communal areas and were able to keep all revenues from wildlife. This transformed the incentives in Namibia. By 2007, Namibian communities were receiving $4.3 million from wildlife, says Fred Nelson, a wildlife expert who spent 11 years in Africa developing wildlife management partnerships. The revenues come primarily from trophy hunting and tourism ventures-important new opportunities in semi-arid areas where income-earning options are limited.

2. To ensure that trophy hunting of elephants, lions, and other animals would be profitable, local communities had to protect the animals and their habitat. These new incentives have led to a natural resurgence in wildlife numbers-lions are returning to areas where they had been overhunted-as well as deliberate restocking of wildlife. Even the number of black rhinos in Namibia has risen from 707 in 1997, to 1,134 in 2004. Citing the 40 years of progress in Namibia, first by giving private ranchers rights to wildlife on their property and then extending them to tribal communities, Nelson told an interviewer in 2013, "This is an extraordinary achievement due to a very iconoclastic approach to conservation."

3. Clearly, property rights to ownership or use are one key to conservation.

References case study

1. See Michael De Alessi, Private Conservation and Black Rhinos in

Zimbabwe: The Savé Valley and Bubiana Conservancies, available online at
www.cei.org/gencon/025,01687.cfm.

2. Fred Nelson, "Conservation Can Work: Southern Africa Shows Its Neighbours

How," Swara (East African Wildlife Society) 32, no. 2 (2009): 36-37.

3. Interview with Fred Nelson, found on March 14, 2013, at
www.iucn.org/about/union/commissions/sustainable_use_and_livelihoods_specialist_group/sulinews/issue_2/sn2_frednelson.cfm

protecting endangered Species with private-property rights
appliCatiOnS in eCOnOMiCS

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9781337345866, Economics: Private and Public Choice, Fifteenth Edition, Gwartney/Stroup/Sobel/Macpherson - Cengage Learning. All rights reserved. No distribution allowed without express authorization. Distributed by Grand Canyon University.