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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.

This assignment uses a rubric. Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.

Case study

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 fuelled 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.

1See 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.

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

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

3Interview 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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