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    Market failure in hunting permits

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    It is argued that Africa should promote hunting, charging large fees for permits to kill animals (for example, $7500 for a permit to shoot an elephant).

    a. What are some of the arguments in favor of the proposal?
    b. What are some of the arguments against?

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    Solution Preview

    Elephants and the environment in general are shared resources. Like public parks, we all enjoy them. Every time a hunter kills an elephant it has an effect on this shared resource and thus on the enjoyment that people might have of them. That is, there are public costs to society that are different from the private costs of the hunter when an animal is hunted. This constitutes a market failure. The ...

    Solution Summary

    Discusses the pros and cons of the hunting proposal.