Elephant Economics in the Rough: Modelling Ivory Trade

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 can be successful in maintaining elephant populations if the ban leads to a stigma effect that reduces demand and increases the marginal costs of marketing ivory. Surprisingly, elephant populations are projected to crash if range states can operate an effective quota scheme that even excludes poaching. However, free trade in ivory can be made to protect the elephant if western countries make effective side payments to range states based on in situ numbers of elephants.