Black Rhino

Why does the market for Black Rhinos create incentives different than other markets? Why can these incentives be changed?

The market for endangered Black Rhinos, whose horn's can be sold to make profit, creates incentives different from other markets as the incentive to kill the rhinos becomes greater as the rhinos become fewer. As the Black Rhinos become more and more endangered, the horns become more expensive and difficult to attain. The horn is used to create things like spears and daggers, and Whelan remarks in Chapter 2 of Naked Economics that these horns can cost upward of 30,00 dollars. While in most other markets the resource is most valuable when "alive" and as a whole, in this market the Black Rhino's horn is most valuable - and the greatest profit results when the Black Rhino is dead. Therefore, those who would like to generate profit from the Black Rhinos kill them, driving them more into extinction and making the price for Rhino horns higher. In order to change these incentives, the Black Rhino must somehow become more valuable alive than dead to the people of the world and the people in the surrounding areas. For example, Whelan shows that if the people living in the Black Rhino's habitat find that tourists are very interested in visiting in order to see the Black Rhino, and those tourists bring in revenue to the surrounding areas market, then the Black Rhino would be worth more alive than dead.  In such a case, the incentives would be changed, because more tourists would visit with the Black Rhino alive, and more people would try to keep the Black Rhino alive than those trying to kill the Rhino. With this change in incentives, the Black Rhinos market would change and the Black Rhino could keep from dying out.