The Poacher's Dilemma:
The Economics of Poaching and Enforcement
Department of Agricultural, Resource, & Managerial Economics, Cornell University, Warren Hall, Ithaca, NY 14853-7801;
In April 2000, delegates gathered in Nairobi, Kenya, to consider the worldwide ban on ivory trade governed by the Convention of International Trade in Endangered Species of Wild Fauna and Flora (CITES). A point of contention during the meeting was the inequity created by a uniform ivory trade policy, given the significant differences in the size and health of elephant populations in several African countries. Ultimately, South Africa, Botswana, Namibia, and Zimbabwe backed away from their efforts for limited ivory trade and, on April 17, 2000, the delegates agreed to reinstate a ban on ivory trade. A similar ban on the trade of rhino horns has been in place since 1977. This paper looks at alternatives to these one-size-fits-all international trade bans for ivory and rhino horns and explores the economics of the decision-making process of poachers under strict enforcement policies. By understanding poacher's decision-making process, local officials can design anti-poaching policies that can optimize conservation given local conditions.
First, this paper provides a brief background on poaching activity in Africa and describes some successful examples of anti-poaching policies. Second, it develops an expected utility model for an individual poacher. This model illustrates the key factors in the poacher's decision-making process. Third, this theoretical model is slightly modified to examine the effects of corruption. Fourth, several of the key assumptions and variables of the model are discussed including the value of a statistical life and the overestimation of low probability events. Finally, the paper offers some concluding thoughts.