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Black Markets: A Comparison of the Illegal Ivory and Narcotic Trades

Deviant Behavior (2020).

Published onJan 01, 2020
Black Markets: A Comparison of the Illegal Ivory and Narcotic Trades


Similarities between the illegal wildlife and narcotics trades pose possibilities for an improved understanding of the spatial and temporal gaps identified in illegal ivory trade literature. In this paper, novel comparisons are drawn between these two black markets. Similarities include those of trade chain dynamics, loss of trade assets to seizures, consumer end product distribution, and data collection methodology, among others. The findings suggest that approaches and theories should be extracted from existing narcotics analyses and applied to future ivory market studies. This approach could provide a clearer understanding of the ivory trade, shedding light on elephant poaching incentives and the effects of policy changes. It would allow for better-informed trade and conservation policy decisions, benefitting long-term elephant conservation.

Keywords: ivory; narcotics; illegal trade; elephants; wildlife; markets


Sosnowski, M. (2020). Black Markets: A Comparison of the Illegal Ivory and Narcotic Trades. Deviant Behavior, 41(4), 434-443.

  1. Introduction to the illegal wildlife trade

Valued over $20 billion annually, the illegal wildlife trade is one of the most lucrative illicit markets, rivalling the global trades in illegal narcotics, arms, and humans (UNEP 2016). The illegal wildlife trade concerns the unlawful sale or exchange of wildlife, defined as any indigenous or exotic wild plant or animal, and their derivatives, such as skins, tourist curios, or food products. These products are sold to a wide range of consumers including animal brokers, biomedical labs, circuses, and private collectors. Involving hundreds of millions of individual plants and animals made up of tens of thousands of species, the illegal wildlife trade has become a “global phenomenon” now one of the largest illicit markets in the world (TRAFFIC n.d.; UNODC 2016).

Studies of global wildlife seizures indicate that the wildlife trade is not evenly distributed across taxonomic groups (i.e. species, family, class). Mammals dominate the trade, accounting for an estimated 51% of all confiscations. Of these mammalian confiscations, one product stands out: elephant ivory. Accounting for 25% of these seizures, the trade in elephant ivory is of global wildlife conservation concern (Rosen and Smith 2010; TRAFFIC n.d.; Kurland and Pires 2017).

Rampant killing to satisfy ivory demands pushed elephants to the brink of extinction by 1976. Plummeting populations brought the African elephant (Loxodonta africana) to the attention of CITES – The Convention on the International Trade in Endangered Species1 – at which point, African elephants were listed on CITES Appendix III. In 1977, African elephants were moved up to Appendix II, expanding strict international trade control in an effort to divert the species from the path to extinction. By 1989, population declines of nearly 50% across Africa compelled CITES to upgrade the species to its highest level of protection – Appendix I – thereby criminalizing all international trade, recognizing African elephants as at risk of extinction, and requesting individual nations to regulate domestic trade accordingly.

The 1989 transfer of African elephants to CITES Appendix I is said to have dramatic impacts on ivory market price. The day prior, one pound of ivory would have sold for $100; the day after, the price per pound dropped to $5 (Lemieux and Clarke 2009). Little, however, has been studied as to trends in ivory price since the ban. The clandestine nature of the trade, which continues in full force despite international interdictions, leads to data deficiency in the research sphere (CITES Secretariat 2016; TRAFFIC 2007). This is particularly true with market price analysis, for which few studies have enough data to complete statistical modelling. A wide geographic and temporal understanding of ivory market price, however, could shed light on elephant poaching incentives, the effects of policy changes on markets, and give both policy makers and conservationists insights on the valuation of ivory and elephants over time. These understandings could allow for better-informed policy decisions benefitting African elephant conservation and ending the ivory trade for good.

This paper will assess previous attempts to study illegal wildlife markets, specifically focusing on the illegal ivory market. Although ivory is one of the most commonly seized wildlife commodities and drives international elephant conservation concerns, the literature on ivory markets is lacking, particularly in regards to price sample analysis, analytic theory, and methodology. These limitations, however, will lead to the drawing of novel comparisons between the ivory trade the trade in illicit narcotics. It is likely that similarities exhibited by these two markets, namely similarities in trade chains through loss of assets to seizures, consumer distribution, and data collection methodology, can be extrapolated to other illegal wildlife products to gain better understanding of the global wildlife trade. With previous narcotic market price analyses performed, these existing studies can lend powerful theories and methodologies applicable for future analyses filling the gaps in the ivory and other trade literature.

Papers included in this review are organized into those examining ivory versus narcotics prices. Those included in the ivory category are from 1989, the year of the CITES trade ban, onwards. They will be organized chronologically and split by approach – those approaching from a solely theoretically perspective and those using a data-driven approach supported with market price samples. Excluded from the ivory review are all studies not directly exploring market price. Papers included on the trade in illicit narcotics include those directly analysing market drug prices that may lend to methodological extrapolation for ivory price studies.







(+) Global scope

(–) No price samples

Effects of legalization on prices and poaching depends heavily on which market model is true

Hsiang and Sekar2016


(+) Global scope

(–) No price samples

One-off 2008 led to increased poaching and seizure rates


Wittemyer et al.2014



(+) Use of price samples

(–) Geographically limited

(–) Lacks statistic analysis

2008 poaching spike was correlated with increased market prices and seizure rates

Gao and Clark2014


(+) Use of price data

(–) Geographically limited

(–) Lack of statistical analysis

  • Rising illegal ivory prices up to 2013 (increases up to 30%)

  • Illegal raw prices in China 10x those in Africa

’t Sas-Rolfes et al.2014

Africa and

East Asia

(+) Use of price samples

(–) Limited samples

(–) Lacks statistic analysis

(–) Geographically limited

  • Price differences between legal and illegal markets in China

  • Increased poaching and seizures circa 2008

  • Price increases between 2000-14

Stiles et al.2015

East Asia

(+) Price trends over time

(–) Lacks statistic analysis

(–) Geographically limited

  • Existence of stockpiling

  • Dropping prices in China and HK as of 2008


Saffer and Chaloupka1995


(+) Uses regression analysis for price models

(–) Geographically limited

Price is elastic - decrease likely to lead to 6-100% increases in drug participation

7 and Reuter1998


(+) Statistical analysis

(–) Geographically limited

Drug prices exhibit high levels of variability across time and space



(+) First price breakdown

(–) Geographically limited

Breakdown of narcotic price determinants

Table 1. All articles included with corresponding geographical scope, critiques, and conclusions

  1. Previous Ivory Price Trend Analyses

Previous ivory market analyses have harnessed the interdisciplinary aspects of ivory trade activity, integrating variables such as elephant poaching estimates, ivory seizure data, or proxies for Chinese ivory demand. Across the literature, principal queries include whether the legal and illegal markets exist as single or separate markets, whether prices are increasing or decreasing, and whether the 1989 international trade ban or the two one-off ivory sales2 had any effect on ivory trade activity. Two publications have approached ivory price analysis from a theoretical perspective, while four have come from a data driven approach.

  1. Theoretical approaches to ivory price analysis

Fischer published the first theoretically rooted approach to ivory market analysis in 2004. Fischer developed economic models of the ivory trade highlighting four arguments often neglected in economic models of trades in endangered species; these included that (1) law-abiding citizens may operate in a separate market from illegal consumers; that (2) legal trade reduces stigma, thereby impacting demand of law-abiding consumers; that (3) laundering may bring illegal goods to the legal market when trade is permitted; and finally, that (4) legal sales may affect illegal supply costs. The end goal of Fischer’s analysis was to determine whether limited legalized trade, such as the one-off sales, in an otherwise illegal good, like ivory, could be helpful for achieving policy goals such as the reduction of elephant poaching. Fischer’s models included a dual markets model, a model of legal sales without laundering, and a model of legal sales with supply linkages. Fischer presented the effects of each model on poaching rates, concluding that stigma played an important role in determining legal demand and market dynamics. Although many scenarios were tested, none were fully representative of current market conditions, and therefore, only theoretically applicable to the ivory trade. The study overall suffered from data deficiency due to the nature of illegal trades, and Fischer’s approach failed to recognize potential differences between the ivory markets in different nations (Fischer, 2004).

Hsiang and Sekar published the second theoretically rooted analysis of ivory market price in 2016. In this working paper, similarly to Fischer, the researchers examined the effects of a global legalization event – specifically the 2008 one-off ivory sale. This legalization event represented an economic experiment in global black market dynamics and allowed for advanced systematic approaches to data collection and analysis. Hsiang and Sekar examined whether a supply of legal ivory decreased ivory price and therefore poaching incentive. The researchers approached legal and illegal markets as separate, concluding that the single legal ivory sale led to rapid, significant, and permanent increases in the production of illegal ivory via poaching, corresponding with increased illegal ivory seizures throughout 2009. The results of this study are consistent with theories that the legal sale of ivory triggered an increase in black market ivory production due to a decrease in stigma associated with legalization, increasing consumer demand, and reducing the costs of supplying black market ivory. These results, however, without price samples, remain in a theoretical sphere. It is important to note that Hsiang and Sekar integrated estimates of the proportions of illegally killed elephants (PIKE) as well as seizure data from the Elephant Trade Information System (ETIS), covariates such as GDP obtained from the World Bank Database, International Monetary Fund Direction of Trade Statistics for import/export data, Chinese Overseas Development Assistance data, data of Chinese populations in African elephant range states, and various other information from the Chinese Statistical Yearbook (Hsiang and Sekar 2016).

  1. Data driven approaches to ivory price analysis

As stated, a lack of data accessibility has limited research on ivory market prices. Three researchers, however, have together compiled the most comprehensive ivory market data to date. Starting in 1998, Esmond Martin, Daniel Stiles, and Lucy Vigne visited hundreds of markets across Africa, Asia, Europe, and the US, collecting data on the abundance of markets, salaries of craftsmen, and most relevantly, prices of ivory. Although their published reports are extensive and data-rich, they are strictly descriptive; data is presented and summarized, but not analysed statistically (Martin 2000, 1998; Martin, Vigne, Kantai-Duff 2017; Martin and Stiles 2005, 2003, 2002, 2000; Martin and Vigne 2011; Stiles 2015, 2013; Stiles and Martin 2008; Vigne and Martin 2016). The data collected from these surveys is often cited across the relevant data driven literature.

One of the first analyses to utilize market price samples was published in 2014 by Wittemyer et al. The researchers gathered data by visiting a monitored site in Samburu, Kenya. They demonstrated that a dramatic increase in the illegal killing of elephants circa 2008 was correlated with increased ivory prices at local markets as well as with increased ivory seizure rates. Although this study is limited to the Samburu region with data starting in 1998, it is one of the first studies to actively seek out ivory market price samples and integrate illegal elephant poaching estimates (PIKE) alongside ivory seizure data (ETIS) into an analysis (Wittemyer et al. 2014).

In 2014, Gao and Clark focused efforts on collecting price data for white (legal), black (illegal), and grey (uncertain) ivory markets across China. Similarly to Wittemyer et al., the researchers collected their price data by visiting physical markets and auctions as well as known online sales forums. Information was gathered on price, type of ivory (raw vs. worked)3, weight of ivory sample, and other relevant variables. Conclusions drawn included illegal ivory prices increasing up to 30% leading up to 2013 and illegal raw ivory prices in China appearing ten times higher those in Africa. Price conclusions drawn, however, were from descriptive (i.e. price per gram) as opposed to statistic analysis. Although these conclusions are valuable, they are limited to Chinese sales between 2013-2014 and do not give a comprehensive overview of spatial or temporal trends (Gao and Clark 2014).

A study on ivory stockpile management published in 2014 by t’ Sas-Rolfes, Moyle, and Stiles briefly focused on raw ivory price trends. Price samples were drawn from Stiles, Martin, and Vigne (2011). Data deficiency, however, restricted the performance of statistical analysis. Researchers instead drew conclusions from the raw price samples, determining differences between the legal and illegal Chinese markets alongside marked increases in elephant poaching (PIKE) and ivory seizures (ETIS) in 2008. The researchers concluded that ivory prices increased significantly from 2000-2014, particularly in Africa and East Asia, but noted a lack of data for China, the most significant market, since 2012. The prices examined in this study were limited to point samples from two select years (1999 and 2010) in Cameroon, DRC, China, Japan, and Thailand, which limited the scope of this study. The researchers also noted that the recent ivory stockpile destructions in the US, China, France, and Hong Kong represented a small proportion of the known holdings, and that their destruction reduced global supply, concentrating ivory market power with speculators illegally holding ivory. If ivory demand continues, this shift in market control is likely to exert upward pressure on prices and make extinction trajectories more likely (’t Sas-Rolfes et al. 2014).

In 2015, Stiles, this time with Rowan, and Moyle, published a report on ivory demand drivers with a focus on East Asia. The researchers used statistical modelling to estimate the amount of ivory produced in Africa between 2002 and 2014, both legally and illegally, as well as the amount moved to consumer markets in East Asia. Their conclusions based on production and sales supported t’ Sas-Rolfes, Moyle, and Stiles’s conclusions on the occurrence ivory stockpiling for speculative purposes. Data included samples collected from online ivory markets and those previously collected by Gao and Clark (2014). Increases in ivory production, poaching, legal Chinese ivory working, and ivory seizures circa 2008 were attributed to both the one-off ivory sale of 2008 as well as the Global Financial Crisis.4 Overall evidence indicated dropping demand and prices in China and Hong Kong – contradicting the previous conclusions by Gao and Clark (2014). Dropping demand would likely translate into ivory price declines and decreased incentive to poach. Like Wittemyer et al. (2014) and Gao and Clark (2014), this study used price samples and estimated consumer sale quantities to demonstrate changes in demand and price. The authors integrate elephant poaching estimates (PIKE), ivory shipping costs, LIBOR, the Shanghai Stock Exchange, and the annual expenditure of gold, silver, and jewellery in China as a proxy for ivory demand, into analyses. Again, prices were presented descriptively; statistical analysis was limited to poaching data (Stiles et al. 2015).

Across both the theoretical and data-driven literature on ivory market price, a few conclusions stand out: (1) increases in market price are linked to increased poaching, and vice versa; (2) ivory prices have been increasing, although the time frame and geographic relevance is unclear – Stiles et al. 2015 and Gao and Clark 2014 disagreeing about trend direction in China; (3) price differences exist between legal and illegal markets; and (4) that geographical differences exist – Chinese prices being up to ten times those in Africa. A multifaceted approach to market analysis is common, including integration of ivory seizure data (ETIS) and elephant poaching estimates (PIKE). Overall, studies of ivory market price lack data, statistical analysis, and both spatial and temporal range. This lack of comprehensive analyses lends to a failure to understand the dynamics of the illegal ivory trade. Other illicit markets, however, can provide parallels for a better understanding. The illicit narcotics trade bares strong similarities to the ivory trade and is a more heavily studied market.

  1. New Parallels: Ivory and Illicit Narcotics

In 2011, South and Wyatt published the first piece drawing parallels between the illicit trades in wildlife and drugs. The authors used expert interviews to compare the illegal wildlife trade in Russia with illegal drug trafficking in Western Europe. Their purpose was to gain further insights into wildlife trade activity through the more thoroughly studied drug trade. South and Wyatt pointed to similarities between the sizes of these markets, the structure of the trade chains, the actors found in each market, and further cited examples of illicit drugs and wildlife seized from the same shipments (South and Wyatt 2011). In this paper, South and Wyatt’s parallels, specifically those examining actors and trade chains, will be expanded upon, and further parallels will be drawn concerning loss of assets due to seizures, and data collection challenges.

Although the similarities between these two trades are generally accepted, Reuter and O’Regan (2016) argue that there are more differences than commonly acknowledged between the illicit trades in wildlife and narcotics. Their research, however, was limited to trade activities in the Americas, and particularly smuggling into the United States. Illegal ivory, however, is primarily sourced across Africa and directed to markets in Asia. With this, different trade patterns arise which it will be argued closely mirror that of narcotics trafficking. The present study demonstrates these parallels while recognizing the differences that have been identified by those such as Reuters an O’Regan in the Americas (Reuters and O’Regan 2016).

3.1. A comparison of the illegal ivory and narcotics markets

Run by the same criminal syndicates, the ivory trade draws likeness to the trade in illicit narcotics, which is arguably a more intensively studied field (Lin 2005; van Uhm 2012). Illicit drugs, like ivory, are a consumer good distributed primarily though markets. Both drug and ivory markets are populated with buyers and sellers, prices fluctuating in response to market pressures and the balance of supply and demand (Underwood et al. 2013; Caulkins 2007).

Figure 1. Trade chain for ivory as conceptualized by Underwood, Burn, and Milliken (2013) and illicit narcotics trade chain as described by Caulkins and Reuter (1998) and South and Wyatt (2011)

With an estimated six transactions made prior to reaching the market, the trade chains of drugs and ivory closely mirror one another (Figure 1). The drug chain as described by Caulkins and Reuter (1998) closely mirrors the conceptual ivory trade model described by Underwood et al. (2013). Drugs, from initial acquisitions to processing through production, distribution, and market sales mirror ivory’s path from elephant poaching, through middlemen transfers and processing by craftsmen, and further shipments before arrival at consumer markets.

Enormously valuable by weight, smugglers of both narcotics and ivory employ sophisticated methods of concealment throughout the chain. Drug markets are characterized by small, vertically un-integrated sole proprietorships that generate both violence and disorder (Caulkins 2005). Unlike ivory, however, shipping costs associated with drugs are negligible, with even drug packaging material accounting for 0.25-0.5% of retail prices. Dominant costs for illicit drugs appear instead to be associated with import, labour, product and asset seizures, and compensation for risks of incarceration or physical harm (Caulkins and Reuter 1998).

Both drugs and ivory undergo a production process before distributed at these markets (Caulkins 2007). Similar to craftsman carving ivory, drug production is most often done by hand as opposed to by use of machines as for mass produced goods like sugar (Caulkins and Reuter 1998).

Loss of assets must be accounted for in market prices. For narcotics, product and asset seizures recorded by the Federal-wide Drug Seizure System estimates that with wholesale prices ranging $20-25,000 per kilo, seizure rates of 5-6% for cocaine represent losses of $1.96-2.45 billion in 1995 alone. When combined with seizure data from local and state law enforcement agencies, asset seizures account for a total of 8-11% of the retail price of cocaine (Caulkins and Reuter 1998). It is likely that the ivory trade suffers similar asset losses due to similarities in shipping and detection methods, detection rates or seized asset valuation remaining unreported due to price data deficiency and variations in the ability of different countries to make seizures (CITES Secretariat 2016).

Price data for illicit narcotics and ivory are both collected by undercover agents or researchers visiting marketplaces, auctions, or websites (Caulkins and Reuter 1998; Martin and Stiles 2005, 2003, 2002, 2000). Data collection challenges, however, are the primary cited reason for lack of price studies across both trades (Saffer and Chaloupka 1995). The papers that do exist demonstrate high levels of variability across time and space (Caulkins 2007; Martin and Stiles 2005, 2003, 2000).

The differences that emerge between analysis of the ivory and drug trades are the consideration of product quality and the treatment of drugs as an ‘experience good’ whereas ivory lends similarities to gold or jewellery – all ‘decorative’ or ‘investment goods’. Whereas quality can be measured for narcotics based on purity and potency, to date there has been no quantification of quality for ivory (Caulkins 2007).

  1. Illicit Narcotics Price Trend Analysis

In 1995, Saffer and Chaloupka used data acquired from the National Household Survey of Drug Abuse to examine the effects of drug price on consumer use, referred to as market elasticity. The log of drug price was regressed on the log of weight times estimated drug purity, with added spatial and temporal variables; this resulted in prices per unit at the city level per year. The researchers concluded that drug use was more price-responsive than previously thought. Decriminalization, which would likely cause price decreases, was also modelled during this study. The researchers concluded decriminalization would increase drug participation by 60-100% dependent on the drug, and therefore demand (Saffer and Chaloupka 1995).

In 1998, Caulkins and Reuter systematically assessed the implications of empirically observed drug prices, focusing on US prices due to data abundance. The researchers cite market prices for various drugs, exploring spatial variation to yield insights about markets. Statistical testing demonstrated significant differences across different cities or neighbourhoods. Drug price variation over time was demonstrated graphically (Caulkins and Reuter 1998).

In 2005 Caulkins again analysed drug price, this time reviewing the interpretation of illicit drug price and purity. Similarly to studies on ivory price by Stiles et al. (2015), Caulkins developed demand and supply-side estimates of the total volumes of drugs produced versus consumed and discussed spatial variations in market prices. As demonstrated by Caulkins and Reuter (1998) there is substantial variation in drug prices between cities, complicating price analysis, but mirroring the spatial variations in the ivory trade. Studies on drug price cite this as a no-win trade off between using a small number of cities that do not fully represent a whole country, or using a larger number of cities including some that may not have enough data to overcome issues of variability (Caulkins 2007).

  1. Conclusions

The trades in illicit narcotics and ivory span trade chain structure, production processes, loss of assets to seizures, and research data collection. These similarities are particularly significant due to an abundance of research in one field that not reflected in the other. Due to this, approaches and theories could be extracted from the former and applied to the latter for the purpose of economic and other forms of analyses. Similarities between the two extend so far as to have corresponding concerns regarding the use of major data sources such as the FDSS and ETIS or PIKE for statistical analysis due to bias (CITES Secretariat 2016; Caulkins 2007).

Illicit markets are estimated to represent a fifth of global economic activity, but many remain poorly understood due to their clandestine nature (Hsiang and Sekar 2016). Data deficiency has limited analysis of market price. As for many illegal wildlife markets, ivory literature lacks a comprehensive analysis across a wide geographic and temporal range as well as statistical analysis of price. Illegal wildlife trade, however, continues to be one of the most profitable illicit trades today, the most lucrative of products including ivory, reptiles such as the ploughshare tortoise, and rhino horn, which sells for an estimated $65,000 per kilogram (WWF/Dalberg 2012; Wyler and Sheikh 2013; Kurland and Pires 2017).

Between 2009 and 2014 it is estimated that over 170 tons of ivory were illegally exported (UNEP 2016), with losses of 100,000 African elephants between 2010 and 2012 alone; this represents approximately 1/5 of the African elephant population decimated in two years (Stiles et al. 2015; Morris, 2017). Other species, such as 13 species of Indonesian birds and a number of parrot species are also facing extinction due to illegal pet trade (Eaton et al. 2015; Pires 2009)

These unsustainable population losses represent more than a wildlife conservation concern (Bennett 2015). Africa loses twice as much in illicit financial flows as it receives in international aid (UNEP 2016). Wild animal and ecosystem tourism brought sub-Saharan Africa over $36 billion and contributed to over 7% of GDP in 2012 alone. Illegal wildlife trade, therefore, is of both economic and conservation concern (UNEP 2016).

Further research should be performed analysing wildlife price trends over a wide spatial and temporal range and harnessing the analytic methodology approaches from illicit narcotics trade studies. Future analysis should recognize separate legal and illegal markets as well as variations in markets across different countries; it should consider regression analysis for price determination, and integrate variables such as seizure rates, consumer demand, as well as shipping, production, and smuggling costs, all supported by the ivory literature.


This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.


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