Debunking the myth that a legal trade will solve the rhino horn crisis: A system dynamics model for market demand

Abstract

There is considerable debate in the literature over whether or not to legalise the trade in rhino horns. Here a system dynamics model is developed that considers five components: rhino abundance, rhino demand, a price model, an income model and a supply model. The results indicate that income elasticities are much greater than previously observed, while demand is relatively insensitive to price. At the same time, legalising the trade without income modification policies did not prevent extinction. The theory of s-curve growth may provide some indications of future growth patterns of Asian economies. Results suggest that, even though the demand curve for rhino horn may be downward sloping as conventional theory predicts, non-conventional demand management strategies may be more effective than price orientated demand curve strategies such as trade legalisation in curbing supply.

Trading on extinction: An open-access deterrence model for the South African abalone fishery

“…This finding implies that there is an incentive for wildlife authorities to maximise short-term revenues at the expense of the long-term sustainability of the abalone population. A similar effect was observed by Crookes and Blignaut 24 in their model of the trade in rhino horn. They found that, although a legalisation of the trade increased the profitability of game farms significantly compared with a no-trade scenario, profits were higher under a policy outcome that resulted in the local extinction of the rhino population compared with profits under a sustainable supply of rhino.…”

“…In the case of rhinos and abalone, a legalised trade must be accompanied by secondary policies, for the sustainability of the resource to be achieved. For rhinos, this secondary policy is consumer behaviour modification that reduces demand, 24 whereas for abalone, it is improving the probability of detection prior to an offence. Under costly enforcement, the market does not provide the incentives to adopt these secondary policies, because profits are higher without them.…”

Applying a conceptual framework to rhinoceros conservation on private lands in South Africa

“…The income elasticity of rhino horn demand also needs to be better understood. Crookes & Blignaut (2015) recently confirmed Milner- Gulland's (1993) finding that rhino horn is a luxury good, which suggests that demand for rhino horn is income elastic 3 . However, there is insufficient evidence on the elasticity of the demand for rhino horn.…”

“…Despite these high prices and the fact that rhino horn is contraband, the Asian market for rhino horn persists, suggesting that 1 Ceteris paribus is a Latin phrase that is used by economists to denote 'all other things being equal' or 'other things held constant'. the demand for horn is price inelastic or insensitive to price changes 2 ('t Sas-Rolfes 2012; see also Crookes & Blignaut 2015).…”

“…Rhino horn is considered an essential medicine that has no substitute (Brown & Layton 2001). It was assumed that increasing Westernization of Asian cultures would reduce demand for rhino horn ('t SasRolfes 2012), but the significant cultural value of rhino horn (Martin 2011) and the fact that horn may be a luxury good (Milner-Gulland 1993, Crookes & Blignaut 2015 have proven this false. Laws against rhino horn use in both China and Vietnam have not eliminated demand for the product ('t Sas-Rolfes 2012).…”