Hannah Ryan- Honorbound
Aparicio PM class
How much time and money did you spend on contributing to preserving endangered species?2 Many people if asked this question would probably say nothing, yet would consider the preservation of these animals very important. The problem here is that many people would rather spend their time and money on gaining utility for themselves instead of helping out a global issue that affects the species at risk of extinction. Yes, there are many people in the world that derive utility from saving a species, but they are not always contributing, rather acting as a free rider. The free rider problem is defined as a market failure that occurs when people take advantage of collective good or service.3
One reason people would rather spend money on fancy cars and clothes rather than donating to the National Wildlife Federation (NWF) is because individuals act to make themselves as well off as possible… individuals seek to maximize their own utility.4 On the other hand, the extinction rate has increased tremendously over the past hundred years, and people are the reason to blame for this major issue. People want to live a luxurious life where we can look in awe at the beauty of nature, but if we do not start protecting species like the Clan William Cedar tree, Sumatran Tiger, Blue Whale, or other endangered species, many of these will start to die off.5 For some, beauty of nature might not be enough, but what happens when entire ecosystems start to die off because they lose vital species that keep them alive.6 Back to the problem of free riders, people want to see species thrive, and they want to fix a global issue like endangered species, but some people would rather have others do the work for them.
If we readdress the question asked in the beginning, another reason this is a free rider problem is because of the lack of incentives that lead to personal utility. An effective conservation strategy must properly align the incentives of the people who are affected by the species.7 Thus, if the National Wildlife Federation created some kind of incentive to get people’s attention in a way that would increase the people’s total utility, there might be less free riders in the world.
The conservation of endangered species is not the only instance where free riders create a problem. There are many other aspects in our economy where people considered as free riders have an incentive to free ride because they can benefit from a good at a reduced personal cost.8 The solution to the free rider problem is to create incentives with rewards to encourage people to contribute something that will in the end increase their total utility. Furthermore, thinking about contributing to preserving endangered animals and actually contributing to the endangered species are two completely different things. We can’t stand around and hope for a change to happen and rely on others to do work for us, but instead we must fix the free rider problem and take matters into our own hands.
1“The Blue Whale.” Prezi.com. May 02, 2014. Accessed June 19, 2017. https://prezi.com/t-wronhbyk9p/the-blue-whale/.
2 Charles Wheelan and Burton G. Malkiel, Naked Economics (New York: W.W. Norton & Company, 2012), 31.
3 Staff, Investopedia. “Free Rider Problem.” Investopedia. August 21, 2015. Accessed June 18, 2017. http://www.investopedia.com/terms/f/free_rider_problem.asp.
3 Charles Wheelan and Burton G. Malkiel, Naked Economics (New York: W.W. Norton & Company, 2012), 6-7.
5 “Species List.” WWF. Accessed June 18, 2017. https://www.worldwildlife.org/species/directory?direction=desc&sort=extinction_status.
6 Marshall, Michael. “Earth – What is the point of saving endangered species?” BBC. July 14, 2015. Accessed June 18, 2017. http://www.bbc.com/earth/story/20150715-why-save-an-endangered-species.
7 Charles Wheelan and Burton G. Malkiel, Naked Economics (New York: W.W. Norton & Company, 2012), 7.
8 Staff, Investopedia. “Free Rider Problem.” Investopedia. August 21, 2015. Accessed June 18, 2017. http://www.investopedia.com/terms/f/free_rider_problem.asp.