Effect of the CITES trade ban on preferences for ivory in Japan

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.