The Rhino Problem

July 23, 2007 at 6:40 pm Leave a comment

I spotted an interesting online blog entry made by Freakonomics co-author, Stephen J. Dubner today. It asked its readers to think up a solution to the following problem regarding wildlife conservation of Rhinos. I decided to have a go at finding a possible solution to the problem using the Economics I know up to now – feel free to leave comments on your views towards addressing the problem.

The main issue is deciding between funding conservation projects in Zimbabwe where the threat of extinction is more imminent but where corruption in the country is widespread, versus Botswana, a minimally corrupt country with poaching stresses being less high.

The first question I would ask is: for any dollar that is given in funding, how much of it is misused? Arguably, it would be quite difficult to find reliable data on this issue. However, if it is possible to get a rough estimate of how much aid was provided to each country in a given year and how much was actually used, this would give us a estimate- albeit a very rough one – as to what percentage of funds is actually used towards the betterment of society.

Next, it would be useful to determine the cost incurred per Rhino saved from extinction. This is a very ambiguous definition, but it could be calculated, using fixed, variable, tangible and intangible costs, to give a rough idea. An example of a cost incurred could be the expenditure on extra security in the form guards and technology, used to prevent poaching. This could give us an idea as to how many Rhinos can be saved per country per XX amount spent in funding.

Another issue that needs to be examined is the difference between poaching rates in the two countries. If differences are not large compared to the amount of money squandered, it may be a better idea to fund conservation projects in Botswana rather than in Zimbabwe.

A final note I might add is that it is not clear whether all the money has to be spent on one country or whether it can be divided among the two. If it can be divided, then the situation arguably gets more tricky. Comments?

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