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The stigma effect stems from the illegal and inhumane nature of trade, such as rhino horn, on the other hand, where atrocities depend on the sheer scale of illegal activity.
Originating from altruism or existential value, legal trade may reduce stigma (while anger does not) and potentially lead to increased demand for rhino horn quantities from law-abiding consumers, and we found that in both legal trade and trade bans, consumers generally prefer to buy rhino horn rather than not buy it, suggesting that stigma has a very limited effect.
This echoes previous findings that found that the use of rhino horn as a traditional medicine has little or no stigma among traditional medicine practitioners and consumers, especially as in-depth interviews with 30 rhino horn consumers revealed.
The plight of rhino numbers, Vietnam's penal code, and possible contribution to international crime did not affect their use of the product, so the preference for legal horns observed in this study may simply come from avoiding sanctions and the risk of buying counterfeit products.
In this case, the stigma (and anger) of legitimate trade is unlikely to have a significant impact on demand.
However, the associated increased availability and knowledge on how to obtain rhino horn may lead to increased demand to assess the extent to which the demand curve may shift due to a possible increase in demand, the need to assess a range of factors beyond stigma effects (see above), and the complex interplay between legal and illicit markets, which is beyond the scope of this study.
Condition Four: Whether rhino horn legally obtained from live rhinos is a sufficient alternative to poaching rhino horn from wild rhinos depends on consumer preferences regarding the origin and legality of rhino horn, which is influenced by their knowledge of rhino farming.
Our findings shed light on consumer preference for wild rhino horn, confirming previous findings that wild rhino horn is considered more effective than farmed rhino horn (as described above), suggesting that farmed rhino horn (as hypothesized in this study) is not a perfect substitute for wild products in legal trade.
Therefore, by informing consumers about the practice of rhino farming at the same time.
We also found great heterogeneity in consumer preferences.
High-income consumers care less about legality.
Therefore, if the legal supply of wild rhino horn is insufficient, even if it is plentiful, these consumers may buy it from illegal sources, continuing to stimulate poaching.
When choosing between wild and semi-wild rhino horn, a larger proportion of respondents, including those in the low-income bracket and less pressing to use rhino horn (i.e., Class 1 and Class 2 members in the LC model), preferred semi-wild rhino horn over wild rhino horn.
Overall, our results suggest that in continuous management practices, the legal supply of rhino horn should be at least semi-wild and large enough to produce significant substitution effects, thereby reducing poaching.
It is believed that providing artificial rhino horn (which is considered indistinguishable from natural products) is also beneficial for rhino conservation.
However, their assertion relies in part on nearly three decades of assumptions that demand for rhino horn is price-inelastic, contradicting our findings.
What's more, its synthetic products for medicinal efficacy are likely to be considered zero, while consumer preferences and their ability to distinguish between artificial and natural products have not been examined.
Therefore, this move may only serve segments where consumers display synthetic products.
Our analysis suggests that the four conditions proposed may only be met to some extent, but that legal trade has the potential to lead to a gradual decline in poaching.
However, even if these conditions are fully met, there is no guarantee of the success of legitimate trade.
It is likely that the black market will continue to coexist with legitimate trade.
It is worth noting that all these conditions ignore other factors that affect demand.
We found that price had a negative impact on preference for buying rhino horn.
That is, consumers are price sensitive, which means that if prices are lowered (e.g., through market regulation) to a level that is more affordable for consumers in lower income brackets, then demand may increase significantly taking into account the possibility of money laundering.
To minimize poaching, legal sales should be kept at a level that minimizes prices and maximizes consumption of legal products by consumers who ignore the law, the advice said.
However, if the fiat price is too low, legal sales will be less likely to cover management and production costs, while demand will grow in a higher proportion because demand is price elastic.
If the legal price is higher than the black market price, legal trading may increase poaching through arbitrage motives, so the pricing strategy of legitimate suppliers should be based on both black market prices and the break-even point of rhino farmers, taking into account management and transaction costs.
Legal trade should bring profits to private rhino owners to incentivize them to contribute to rhino conservation.
It is suggested that rhino horn must be sold at a minimum price of $11,500 per kilogram to incentivize private rhino owners.
This price is much lower than any previously reported black market price (ranging from $17,852 to $65,000 per kilogram), which allows flexible pricing strategies to be implemented in the event that legitimate transactions are introduced.
Our results show that the legal rhino horn marginal WTP of our survey subjects is about $20,000 per kilogram.
If the starting price of legally regulated supply trade is set at a similar level, this surplus may help to cover regulatory costs.
Setting a lower price would allow for attempts to outmaneuver illegal suppliers (assuming money laundering could be controlled), but would carry the risk of increased demand.
Of course, illegal suppliers can also lower prices for the sake of competition, poachers may not be sensitive to price changes, and despite falling prices, they may continue poaching rhinos How these markets will interact, and what the likely outcome of a potential price war is, remains unclear.
Therefore, the Private Rhino Owners Association suggests that the best way to check market interactions is for pilots to test for legal trade
In addition, our results provide insights into the design of behavior modification strategies.
Motivation to use rhino horn was influenced by different reference groups, including informational, utilitarian and value-expressing references, and we found that more and more peers were using rhino horn with no or negative effects, which increased their price sensitivity and reduced their preference for more expensive wild rhino horn.
This is consistent with the results of our focus group discussions and the fact that their respondents mostly listened to their peers (e.g., family, friends, colleagues who have used rhino horn) when deciding to buy or use rhino horn.
Peer references have a smaller effect on semi-wild and legal rhino horn in WTP, but relatively large effects on wild rhino horn in WTP.
As the number of companions who use rhino horn without or with side effects increases from 0 to 10 (out of 10, i.e. 100%), WTP for rhino horn has declined by more than 18% Therefore, activities that educate consumers about the negative or no effects of rhino horn on health treatments may help reduce demand, thereby increasing the ability of legal trade to meet demand, thereby contributing to rhino conservation.
Our findings include results that contradict previous mostly theoretical studies and empirical studies based on different types of consumers: while rhino horn has long been considered inelastic in demand for luxury goods, we found that preferences across all income groups are resilient to price changes.
However, differences in resilience and urgency in the use of rhino horn between peers at different levels were small. Through a selective experiment, it was found that legally controlled trade reduced consumer WTP for rhino horn.
In contrast, we found that consumers are willing to pay more for legitimately sourced horns. This contradiction may stem from differences in study design and, more importantly, in sample composition.
Hanley et al.'s sample consisted of younger people with lower incomes, which did not quite match the characteristics of typical rhino horn consumers, and our comparison sample consisted of self-reported consumers and potential consumers, mainly middle-aged and older men from the higher income bracket.
Consistent with the typical characteristics of Vietnamese rhino horn consumers, a large proportion of our self-reported consumer sample (64% of the total sample) said they did not buy rhino horn, which means that someone offered to drink rhino horn powder or receive a piece of rhino horn as a gift.
If so, people will think they are not price sensitive.
However, there was no difference in price sensitivity between consumers and potential customers (tested by price and interaction between virtual humans representing consumers and potential customers, suggesting that there may be no difference in preferences between individuals who consume only rhino horn and individuals who buy rhino horn).
This may be because reciprocity is expected when a cup of rhino horn powder is offered or a piece of rhino horn is given away, meaning that these consumers may consider buying rhino horn in return for this favor and boosting their own prestige.
Our research provides important insights into consumer preferences and demand elasticity for rhino horn.
While not sufficient to definitively establish the consequences of legitimate transactions, our results show some supporting arguments that legitimate transactions can shift much of consumers' preferences to the corner of legitimate supply.
Consumers generally prefer and are willing to pay more for wild rhino horn, especially those that come from legal sources.
However, we found considerable heterogeneity in consumer preferences.
High-income consumers have a stronger preference for wild horn and are less sensitive to legality, although the size of the impact is small.
We also found that preferences across all income groups were price elastic, suggesting that a small piece of rhino horn habitually given as a gift and ground into a powder dissolved in water to drink is a normal commodity.
The extent to which legally controlled trade contributes to reducing poaching depends on the ability to supply sustainably harvested wild and semi-wild rhino horn to the market at competitive prices, changing consumer preferences for legal products, and enforcement efforts along the value chain.
While the illegal market is likely to continue, profits from the sale of legal rhino horn could be used by rhino keepers to bolster on-site anti-poaching activities.
A number of important questions remain unanswered, including the extent to which legal supply can meet potentially growing market demand and whether consumers can trust less wild rhino horn to have similar health benefits, if any, to wild rhino horn.
In addition, our research has only yielded insights into Vietnamese consumers, while the Chinese tourists and Chinese mainland market visiting Hanoi to buy rhino horn remains largely unstudied.
While more evidence is needed to confirm whether legal trade contributes to rhino conservation, demand reduction activities should continue as our results show.
By encouraging people who have not experienced the negative effects of using rhino horn or using rhino horn to come forward in the debate, campaigns based on the impact of peer reference may be a viable strategy to reduce demand.
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