Friday, March 22, 2013

Hunting and Economics

One of the first courses that I taught here in the Department of Economics at the University of Iowa was a course titled, Natural Resource Economics, which I had never taught, but was a great deal of fun.  In teaching that class we bumped into a type of economic good called a common resource (also mentioned in my Principles of Microeconomics course).  Common resources are non-excludable (cannot be restricted usually due to a lack of property rights) and rivalrous in consumption (my consumption of that individual good reduces someone else from consuming that individual good).  As an example, many animals that are hunted are common resources.  Deer are not individually owned (as far as I am aware here in the US), and thus someone hunting a deer does not infringe on someone else's property right, so the deer is non-excludable, but once an individual deer is hunted, someone else cannot kill that particular deer, so the deer is rivalrous in consumption.  Usually, to manage the species, hunters have to pay to acquire a license to hunt the animal and there is a "season" or a time period in which it is legal to hunt the specific species.

Here is an interesting twist.  The New York Times reports that Utah has opened up a hunting season on coyotes, in which the state is paying (not being paid) to hunt coyotes - $50 per coyote with a quota of 10,000 coyotes.  The argument for this government policy is that coyotes are a nuisance species, killing mule deer, which reduces mule deer herds and economic revenues from hunting and wildlife.  So, the state has allocated a total of $500,000 mainly to pay hunters to hunt coyotes.  As the article mentions, coyotes also prey on livestock, so a reduction in the coyote population benefits livestock owners, and taxpayers in the state of Utah are transferring their economic surplus to livestock producers.

Economically, what would increase efficiency is to require livestock producers to pay a portion of the price as a way of increasing the total economic surplus of this implicit per unit subsidy.  What will be interesting to see is if some enterprising entrepreneur comes up with a way of fencing in coyotes and charging hunters to hunt their fenced in coyotes.

For a different hunting example, see my blog on the international bans on whale hunting.

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