Abstract
This paper characterizes the ivory demand in Japan, formerly, the largest consumer country of ivory, by imports of worked ivory since 1970. During the entire period, the preference parameters, each of which represents the elasticity of the marginal rate of substitution, suggest that a change occurred in 1989, when the African elephant was listed in the CITES Appendix I. We conduct hypothesis tests on the differences in consumer preferences for observation periods before and after 1989. We show that Veblen effects caused the increasing shift of the demand in the first period, meaning that ivory products were more preferred as their price increased. They were purchased even though the price continued to rise before the trade ban intervened. The Veblen effects disappeared in the second period when the demand became homogeneous of degree zero. Due to public awareness of illegal trade and endangered elephants, the quantity of the demand for worked ivory quickly declined. The price has fluctuated unpredictably since the 2000s, and a small amount of worked ivory is imported at a high price because of the unavailability of ivory products. Prohibition could influence the social preference for wildlife products from which domestic demand is formed.
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Notes
As of 2 January 2017, https://www.cites.org/eng/disc/species.php (Access date: 11 Sept 2019)
The values (yen) and amounts (kg) are from Trade Statistics of Japan, http://www.customs.go.jp/toukei/info/index_e.htm (Access date: 12 Sept 2019).
https://www.cites.org/sites/default/files/document/E-Res-10-10-R17.pdf (Access date: 16 Sept 2019)
Both raw and worked elephant ivory are defined in Resolution Conf. 10.10 (Rev. CoP17) as those specimens that are subject to the CITES implementation in Article 1, paragraph (b).
Such specimens include the walrus, hippopotamus, narwhal, and mammoth tusks (from Siberia).
For details of this survey, https://www.stat.go.jp/english/data/kakei/pdf/p2.pdf#page=1 (Access date: 11 Sept 2019)
The same URL as footnote 2.
We owe the editor for advising us to use the IV method for this estimation.
Heteroskedasticity-corrected standard errors are employed with the HC3 (Long and Ervin 2000) type of covariance matrices. The Goldfeld–Quandt test strongly rejects the null hypothesis that the disturbance variance is constant throughout the entire period (\(p=5.202 \times 10^{-6}\)), at a break point \(t=20\).
This amounts to minimize the Bayesian information criteria (BIC) : \(\log RSS + (\kappa \log n )/ n\) because the number of observation n and the number of explanatory variables \(\kappa\) are constant
We do not invoke 3SLS estimation here, because the purpose of this paper is to examine the difference between these periods. One equation will be affected by the other by 3SLS using the results of 2SLS.
There is no data of \(x_i\) for the other goods and services. Then, \(M_i\) is the numerator for \(i=1, \ldots , 5\)
We have checked that the demand is homogeneous of degree zero in all prices if it is the homogeneous in total expenditures ‘and’ all prices in this case.
This conclusion was the same with the maximum likelihood test.
Personal communication from the Tokyo Ivory Arts and Crafts Association.
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Acknowledgements
The author thanks Ken Akao for insightful suggestions, Yoichi Arai for econometric advices, anonymous reviewers for encouraging and enthusiastic comments, and Isamu Matsukawa for mathematical in-depth checks. The reference to Martin (1985) is made possible by the courtesy of World Wildlife Fund Japan.
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Kurohata, M. Effect of the CITES trade ban on preferences for ivory in Japan. Environ Econ Policy Stud 22, 383–403 (2020). https://doi.org/10.1007/s10018-019-00261-7
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DOI: https://doi.org/10.1007/s10018-019-00261-7