INTRODUCTION

Economic principles guiding human behavior have a minimalist role in the framing of the Endangered Species Act (ESA) in the United States (Brown and Shogren 1998). Its principles and procedures make sense only if the individuals adversely affected by the ESA simply acquiesce, making no effort to avoid the cost of compliance. Illustratively, if my land has habitat characteristics for a species about to be listed, regardless of the cost imposed on me by the listing, I will not remove the specific flora in order to preserve the value of my land which will be lost when the species is listed. Such an assumption is empirically false and the species are the worse for it (Brown and Shogren 1998; Mann and Plummer 1995).

The formal procedures taken to manage the black rhinoceros exhibit the same shortcoming. The consequence for the black rhino of disregarding economic incentives guiding human behavior has been profound, as we portray below. We show how fairly simple economic reasoning can be exploited to restore the black rhino population from its current endangered status. We hope this dramatic example of mismanagement and our antidote will lead to the inclusion of more economic reasoning in setting policies for managing endangered species in the future.

Recent years have witnessed a growing public antipathy toward trade in parts of popular animals, particularly megafauna such as the elephant and rhinoceros. Conservation groups such as World Wildlife Fund (WWF) and the International Union for the Conservation of Nature were instrumental in instituting a ban on trade in rhino horn since 1977 and a ban on ivory since 1989.