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Trading blows over Trading Rhino Horn

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In the relatively polarised debate on whether a legalised trade in rhino horn can save the species from extinction, it seems that both sides are guilty of cherry picking to one degree or another. Sweeping statements and unsubstantiated assertions are commonplace, according to strategist Ross Harvey, with each side caricaturing the other, setting up straw men and obliterating them.

Ivo Vegter has been one of the strongest proponents of a legalised trade in rhino horn, and often makes the claim that anti-trade protagonists place implausible onus of ‘proof’ on the pro-trade lobby. Some of the popular rhetoric offered, for instance, at the department of environmental affairs’ committee of inquiry public hearings was that this is simply an Economics 101 issue: Increase supply, thereby suppressing price (and removing the incentive to poach), and the problem is solved. Considered reflection on supply and demand dynamics, however, show that such static models cannot be gainfully employed. Partial equilibrium theory’s supply and demand graphs rely on unrealistic assumptions such as perfect competition and symmetric, full information. Those factors are entirely absent from the poorly understood and dynamically complex trade in rhino horn. This is closer to an Economics 505 problem, and requires knowledge of game theory, ethics, marketing and dynamic modelling.

In the name of avoiding ‘101’ traps and providing specific responses to specific arguments, there are a few points in the column mentioned above that are worth addressing.

First, Vegter argues, “It seems naively hopeful that we can rely on demand-reduction programmes”. Even if they work, they will purportedly take longer than the time we have to save rhinos from extinction. But this is not substantiated with actual data from actual demand reduction campaigns that have successfully targeted trade in other products such as shark-fin soup. The majority of known demand for rhino horn is currently concentrated among elite consumers in Vietnam. This provides a strong strategic reason to allocate capital towards psychologically effective demand reduction campaigns. An integral part of any demand function is ‘consumer preferences’, which are dynamic and can shift relatively rapidly in response to persuasive marketing and advertising. Vegter argues that it is patronising to attempt to persuade Asian consumers that rhino horn is the least effective and most expensive medicinal cure for ailments such as fevers. It is a “faith that will be hard to shake”. However, this view appears more patronising than persuading consumers to abandon such faith. Advertisers consistently attempt to change consumer preferences and we don’t accuse them of being patronising. Worse than patronising, from an ethical perspective, is to endorse trade in a product that has medicinal value of close to zero.

One thing that is likely to counteract the effects of demand-reduction campaigns, though, is mixed messaging. Sending ambiguous signals to potential markets, as South Africa is currently doing, will likely result in undermining demand reduction efficacy. Pro-traders are too quick to jump to the conclusion that demand reduction is ineffective, but they seem unwilling to control for factors such as ambiguous supply-side signals. Moreover, awareness campaigns are different animals to specifically targeted reduction campaigns.

Read the full article: http://www.dailymaverick.co.za/article/2015-04-13-op-ed-trading-blows-over-trading-rhino-horn/#.VTdZd62eDGc

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