Here's a Bad Idea: Destroy Rare Hides to Save Animals

Next week, I will graduate from college so it was nice to feel today that my very expensive college education has made me smarter: this article showed me that common sense is, indeed, not so common. In Kashmir, to crack down on poaching, law enforcement experts have decided to compensate merchants for a large quantity of rare and illegal furs and destroy them. I can see how someone would thik this was an efective--or more likely a 'fair'--policy, but this plan of action will do nothing but further endanger endangered species. Here is why: demand curves are downward sloping. As you reduce the quantity of a good, all else equal it's market value will increase. When you burn tiger hides, a tiger hides become more valuable. Unfortunately, jaguar hides only come from one place: dead tigers. The more hides they burn, the more money is in killing tigers.

I'm thinking about ways that this might reduce poaching, and I can think of a few. By introducing uncertainty in the lives of merchants, the governemnt could make selling illicit furs a riskier occupation (though they aren't even hurting the people who sell these furs! They are PURCHASING them).

If this was a way of changing peoples' preferences for rare furs, then it might have meaningful, positive long-term implications but I don't think that will happen or that this is their intention. I don't know why does buy tiger furs ( I would love to know!), but I don't imagine they will feel very differently about tiger furs after they have been destroyed. If anything, they may become more of a 'status symbol' as they will certainly cost more.

In a rigorous economic model, there are two ways to reduce the number of tigers being slain for fur: reduce either supply of demand. Someone will ask, why doesn't burning hides reduce the supply? Becuase supply and quantity are not the same thing. A supply curve describes how many hides can be supplied at any given price. Burning hides does not change that. To reduce the supply one would have to make it harder or more expensive to poach or trade poached furs.

Why does criminalization reduce supply? Poaching is different from hunting only in that it is illegal. Being illegal means that there is a risk associated with working as a poacher, traficker, of trader of an illegal hide. Just as people who wash the windows of skyscrapers are paid more than people who wash the windows of flats, people who hunt illegally are paid more than people who hunt legally (even ignoring the fact that you'd have to pay me a lot to hunt a TIGER). This works like a tax: you have to pay people more, so it costs more to produce a poached fur. That cost gets passed on to consumers, and a smaller quantity will sell.

I wonder if the criminilization of hunting tigers makes tiger fur expensive or if the criminalization is so ineffective that the sheer scarcity of tigers makes them expensive. I would guess the latter, but if you wanted to be sure one would look at the decline in the tiger population over time and how much harder it has become to catch a tiger. The problem with this research method remains: endangered status is not exogenous, it is determined by how many species have been killed. You could compare the wages of poachers in India versus in Myanmar or Buthan or someplace that has better or worse law-enforcement. This would be a very interesting paper and I'm quite sure someone with the right data could publish a great paper!

Laws can also reduce demand for an illegal good. I suppose when someone purchases a tiger fur, they want to display it (??). If laws make it more difficult to display my fur, and I can only enjoy it privately, it may be worth less too me. I am not willing to pay as much. By the same token, if I risk spending five years in an Afghan prison for my ownership of a tiger hide, I'm likely to settle for a nice rug. Unfortunately, I suspect the punishment is usually both unlikely and trivial to the offender: a fine (or bribe) at worst.

Mosquitoes

So I have blogged extensively about mosquitoes and disease, probably more than almost anyone on the intra-web Yet I am by no means a mosquito or disease expert, I know very little. But there is something I'm really pained to understand. Malaria used to be a big problem in the United States from Louisiana to Maine but then they drained swamps and killed misquotes. Yet I get bit by mosquitoes all the damn time (midnight soccer is especially dangerous). Why don't I worry about Malaria?

I know Malaria is not carried by most species of Mosquitoes, but why were we able to eradicate particular species in the United States? Why haven't they returned? WTF?

Fertility

Thomas Malthus earned his title as the first economist in human history for forecasting that because the resources of the earth were finite an agency problem called the “Tragedy of the Commons” fated man to live on the margins of survival. The Tragedy of the Commons is that parents decide how many children to have based on the the private cost (or benefit) of raising children and not the greater social cost of adding another member to society. This led to overpopulation because while everyone desired fewer people, they were not willing to settle for fewer children themselves (“too much of you, just enough of me”).

Because we yield diminishing returns from natural resources, the finite resources of Earth limited population to mere subsitence. This limitation fated all humans to live on the margins of survival, for if we experience an increase in our standards of living (more food and resources) we squander it in the form of more children. You might ask, “why would we squander an increase in wealth on more children?” and the answer is that “if you don’t, surely someone else will.” Since you will return to your impoversed state of marginal survival in any case, it is worth it to try to return with another child if you like having children at all.

Shortly after Malthus died, the Industrial Revolution ushered an era of the highest levels of human consumption in our history; middle classes today live better than the Royalty of the Middle Ages. It would shock Malthus that as our real wealth increased, we do not have more but have substantially fewer children than we did before. Why did this happen?

The modern economy is different from the medieval economy in many ways, but most importantly because it is marked by social mobility because it offers returns to human capital. Is it true that the important difference between the modern economy and the pervious economy is that there is a quality of children, measured in human capital. There are investments we can make in our children to make them more or less wealthy… social mobility didn’t exist.

The decline in fertility in response to our newfound wealth tells us something critically important about parents: they are willing to sacrifice the quantity for the quality of their children. In other words, parents are altruistic toward their children, and a child’s welfare contributes to a parent’s happiness. Insofar as a child’s welfare is a function of how much they can consume, parents are happier to have fewer children consuming more than a lot of children who consume less. If you don’t believe this, realize that virtually anyone in a developed nation could certainly afford another child in the sense that they could afford to feed one more child (without reducing the parent’s consumption) but prefers not to because they would not be able to give that child enough nourishment, toys, education, and attention. In otherwords, they prefer the higher quality child.

So as we got wealthier, we have preferred to substitute the number of children for higher quality children. Yet, in most developed nations poor families have more children than wealthy families. Why is this?

• There are a few explanations. First is that poor and wealthy families may face different prices. Since there is typically geographic separation between classes, particularly between urban and rural areas, it could be the case that in rural areas where food and housing are cheaper, the cost of having another child is cheaper. If the price of children falls, the quantity should increase. This will be magnified if, as in many rural communities, children in rural families contribute productively to the family’s income at younger ages, effectively lower the price of children for poor, rural parents.

Second, it is also true that an increase in an individual’s wage rate increases the value of their time. Time spent with children is one of the largest costs that parents pay when they have more children, thus an increase in the wage rate may increase the cost of having more children as well. The parent may substitute in the direction of having more educated children as well.

Finally, even if the other effects don’t hold to be true, the parent may elect to have higher-quality, better educated children when his or her income rises, even if other prices remain constant. As a property of convex preferences, parents will optimize when they invest equally in all children (since we assume they are identical). Thus, when the parent invests more in the quality of children, they invest more in the quality of every child. Since this creates a budget constraint that is itself convex, not linear the decision to invest more in a child’s human capital requires that parents do the same for each child and effectively raises the price of children.

This convex budget constraint is important: The number of children affects the price of children. IF the price of children was constant, having one child fewer would save you the cost of his education. If the price of children increases, you would want to substitute toward having fewer children of greater quality. But there is also a second order effect: having higher quality children raises the cost of having children again, since you must improve the human capital of all your children. This further encourages you to reduce the number of children you have.

The revelation about preferences, that humans trade quality for quantity, seems to come in the face of evolutionary theory, which suggests that most species are interested only in maximizing the quantity of their offspring. Over time, the people with preferences that populate the earth become "us." This is why we like sex. But why do we worry about having too many children? (it's interesting to realize that aside from having children out of wedlock or at an age when it was dangerous to the mother, or when people were afraid their child wouldn't survive, there was never concern for having too many kids, or that kids might 'accidentally' result from sex. It is only now that we have to be concerned about how much time and resources we can give to each child to increase their happiness that we are worried about having too many children).

I have two thoughs on this: First, in some basic level, the quantity quality trade-off increseas survivorship, but this is surely a very basic level, a Malthusian level. Second, preferences about these trade-offs were unimportant for most of human history, so natural selection has not impacted our sentiments. This feels like a bad argument...

Anisha is so pretty!

We went to the Projects! that is Cabrini Green in the background, this is a place called 'death valley'. A former cop and resident was telling us about occasions where snipers had stood on the top of this and killed people. "he was good," we were told.

This is where I play soccer.

Cabrini Green

Please note the bus: "White Transportation".