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Property Rights. Principle 4: Incentives Matter. Principle 5: Markets work with competition, incentives, information and property rights. . After one hunting season No Property Rights. After one hunting season With Property Rights. What’s the Difference?. PROPERTY RIGHTS.

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property rights

Property Rights

Principle 4: Incentives Matter.

Principle 5: Markets work with competition, incentives, information and property rights.

what s the difference
What’s the Difference?

Unit 13: Property Rights

slide5

PROPERTY RIGHTS

  • The rights to use, control, and obtain the benefits from a good or service
  • Property rights
    • exclusively held by an owner (clearly defined)
    • easily enforced
    • transferable at low cost at the owner’s discretion

Unit 13: Property Rights

property rights conserve and develop resources
Property rights conserve and develop resources
  • Your desk
  • Your walls at home vs. your walls at school.
  • Your dog and your lawn at home vs. your dogand the lawn at the city park.

Unit 13: Property Rights

the tragedy of the commons
The Tragedy of the Commons
  • A scarce resource owned in common is overused since no individual pays the full cost of using the resource.

Unit 13: Property Rights

the tragedy of the commons8
The Tragedy of the Commons
  • The Llama Children

Unit 13: Property Rights

maximizing family income
Maximizing Family Income

Unit 13: Property Rights

slide10

Property owned in common will be overused. Establishing rights helps use the resource most efficiently.

examples
Examples
  • Commonly owned European forests.
  • Coca in South America
  • Irish potato famine – landlords unsure of length of ownership pillage the land.
  • Condominium dweller pays flat rate for utilities. Will he overuse the utilities?
  • It’s nice to share, but it’s not efficient!

Unit 13: Property Rights

preserving endangered species

Preserving Endangered Species

Why don’t we see deer, elk, antelope, and bear roaming the streets

of San Bernardino?

two reasons some animals are disappearing
Two reasons some animals are disappearing.
  • If the dead animal is valuable, and there are no property rights, if I don’t kill it, someone else will.
  • To some, animals are nuisances and compete with humans for scarce land.
    • Bears, wolves, prairie dogs, alligators, crocodiles, mountain lions, bison

Unit 13: Property Rights

it is easier to establish property rights if
It is easier to establish property rights if:
  • the animal does not travel widely,
  • the animal is contained in one nation,
  • the animal does not “flow” as fish in streams,
  • enforcement costs are not high, and
  • people are willing to come together to preserve the species and to police themselves.

Unit 13: Property Rights

what s the difference15
What’s the Difference?

Unit 13: Property Rights

some facts
Some facts
  • African wildlife is a food source, a nuisance to crops and a danger to humans. They look at them as “oversized, dangerous rodents.”
  • From the villagers’ perspective, they are far more valuable dead than alive. (A villager can earn up to 100 times the average income by poaching ivory.)
  • There is no incentive to preserve them and actual incentives to destroy them.
  • “Just say no”?????

Unit 13: Property Rights

poachers and villagers
Poachers and Villagers
  • There are huge profits to be made from poaching.
  • The villagers are glad to see the pests go.
  • In Kenya where elephant hunting is banned, the population has gone from 40,000 to 4,000 in 20 years.
  • In Zimbabwe, where hunting is permitted the elephant population is increasing.
  • Why?

Unit 13: Property Rights

saving wildlife through property rights
Saving Wildlife through Property Rights
  • CAMPFIRE program established property rights (incentives for villagers) and disincentives for hunters.
    • Permits to hunt elephants are sold at $10,000.
    • Villagers “own” elephants and get 75% of the revenue from the permits.
    • The meat belongs to the villagers.
    • The villagers are compensated for crop damage.
    • Average village income has increased by 25%.

Unit 13: Property Rights

saving wildlife through property rights20
Saving Wildlife through Property Rights
  • Results
    • In Zimbabwe, land dedicated to game conservation has grown from 12% to 17%
    • In Kenya, elephant population has declined from 40,000 to 4,000 in 20 years of banned hunting.

Unit 13: Property Rights

saving wildlife through property rights21
Saving Wildlife through Property Rights
  • What has happened to the benefits to villagers of preserving the elephants?
  • What has happened to the costs of the villagers from preserving the elephants.

Unit 13: Property Rights

the near extinction of the beaver
The near extinction of the beaver
  • Europeans had overhunted them.
  • French came to new world for beaver.
  • Beaver increasingly scarce in America due to overhunting
    • with exception of Cheyenne territory where property rights were rigorously enforced
  • Beaver saved by silkworm

Unit 13: Property Rights

the near extinction of the bison
The near extinction of the bison
  • Indians live on less and less land, increasing competition for bison on that land
  • Bison hunted for robes and cows and calves were most desirable
  • Number of bison killed
    • 1874 – 20,000
    • 1875 – 100,000
  • Today, bison are raised for meat and tourism

Unit 13: Property Rights

native americans preserved wildlife without property rights
Native Americans Preserved Wildlife without Property Rights??

What happened to the Wooly Mammoth or the Sable Toothed Tiger?

Unit 13: Property Rights

will wildlife become extinct
Will wildlife become extinct?
  • .02% of all animal species exist today.
  • There is an inevitable competition between humans and animals for land.
  • Profits in illegal poaching are high.
  • Banning ivory or other trade is not effective.

Unit 13: Property Rights

will wildlife become extinct26
Will wildlife become extinct?
  • .02% of all animal species exist today.
  • There is an inevitable competition between humans and animals for land.
  • Profits in illegal poaching are high.
  • Banning ivory or other trade is not effective.

Unit 13: Property Rights

will wildlife become extinct27
Will wildlife become extinct?
  • Establishing property rights to valuable animals provides an incentive to preserve the animals.

Unit 13: Property Rights

how to destroy endangered species
How to destroy endangered species
  • Enforce the ESA (endangered species act)
    • If an endangered species is found on my land, I lose the right to deal with my land as I like.
    • I must take certain precautions to preserve the animal at my expense.
    • I have an incentive to s…., s…….., and s……..

Unit 13: Property Rights

compare the policies
Compare the Policies

Unit 13: Property Rights

main points
Main Points
  • Effective property rights have three characteristics: they are
    • 1) clearly defined, 2) effectively enforced, and 3) easily transferable.
  • The Tragedy of the Commons occurs as a scarce resource owned in common is overused since no individual pays the full cost of using the resource.
  • Elephants, bison, beaver, water, air, rain forests, are all examples of the Tragedy of the Commons.
  • The Endangered Species Act can create negative secondary effects because it deprives people of their property rights.

Unit 13: Property Rights

main points34
Main Points
  • Establishing property rights for wildlife is easier if
    • the animal does not travel widely,
    • the animal is contained in one nation,
    • the animal does not “flow” as fish in streams,
    • enforcement costs are not high,
    • people are willing to form an agreement to preserve the species

Unit 13: Property Rights

main points35
Main Points
  • Establishing property rights by creating a market for pollution permits maximizes the efficiency of cleanup.

Unit 13: Property Rights

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