Panda economics, panda science and critical reading

Apple Daily Taiwan reported,

• Chen Yumin, the Director of Taiwan Animal Society Research Association, said, “according to the research by US Fish and Wildlife Service from 1938 to 1988, 106 pandas have been bred through artificial insemination, only 32 survived for over 1 year.” Chen went on to “conclude”, “This shows that artificially inseminated panda does not work, and Taiwan should not accept panda from China mainland”
• Annual cost to keep a pair of panda is NT$18.68M, all the related research funds, education materials for the public and other expenses are included (estimated and budgeted by Taipei Zoo)
• Agriculture Commission need to evaluate the feasibility and will deliver a decision by March 23 (note: reasons given include suitability of Taiwan weather and WWF compliance), adding all the bureaucracy the earliest the panda could arrive is around July and August.

Panda science (and pseudoscience)

Apple Daily is a rarity in Taiwan, in that its reports are usually unbiased. But I am not sure if its reporters are, or if they are capable to being a critical reader. In particular, I am amazed how Chen can call himself a scientist. Here is why

• Anyone who uses data from 1938 (or even 1988) for artificial animal breeding must be totally ignorant of the development biological science in the past few decades, or maliciously manipulating the data.
• Here are more recent statistics: “The Wolong center inaugurated in 1983 has welcomed 90 baby pandas born through artificial insemination, 77 of whom have survived…Major breakthroughs have been reported after the 1990s. Artificial fertilization gave birth to nine baby pandas in 2000, 12 in 2001, 10 in 2002 and 15 in 2003...Last year, China's 30 artificially-fertilized giant pandas produced 12 offspring but only nine survived… Artificial insemination gave birth to 25 baby pandas [in fall 2004], of which 21 have survived, a record number since China first took the challenge in the 1960s.”
• So the relevant survival rate, as #16 and #19, which are designated to go to Taiwan, were born in Wolong, is 77/90=86%. The survival rate for 2005 is 84%.
• The pseudo-scientist Chen brought up something even more irrelevant, using the one-year survival rate, because both pandas (#16 and #19) are 1.5 year healthy now

The Business case

The ultimate question is: could the additional revenue brought to the zoo justify the incremental costs in keeping the panda? Here are some benchmarking:

• "Zoo Atlanta received 708,700 visitors. Those numbers spiked to 1,037,200 in 2000, after the arrival of the pandas,” That is 46% hike in the first year. 329k additional visitor would generate $3.29M additional revenue if one assumes $10/visitor on average (2005 price is $17/$12). That is NT100M. This does not include additional sales in memorabia.
  
• Atlanta has to donate $1M to get the panda for 1 year, while Taiwan does not have to pay at all
• The increase in the following year should be smaller, but it should still be a major attraction for tourists
• “The National Zoo's pandas, female Mei Xiang and male Tian Tian, went on display in January 2001. Before they arrived, National Zoo officials predicted that they would draw an additional 400,000 visitors a year to the free Smithsonian Institution park, and bring $1.2 million more in food, drink and souvenir sales…Sales of food, drink and souvenirs nearly doubled -- from $5.5 million in 2000 to $10.3 million in 2001” – Washington Post
• Ching Mai Zoo in Thailand recorded triple admission number after loaning 2 pandas for 6 months, incremental revenue was over THB27M (NTD22M). It was claimed that the overall economic impact for the pandas on Ching Mai was about THB 725M (NTD580M), including tourist expenses such as hotel and meal.
  
• A recent study commissioned by the Chinese government found that a properly managed ecotourism program in the Wolong Panda Reserve could generate between $29 and $42 million per year.” - Ecotourism: Panda's Paladin or Bane?
  

How does this apply to Taipei Zoo?

• In 2000, Taipei Zoo’s admission is 5.7M, another estimate has it at 3.5M. The admission price is very lower in Taipei ($2 adult, $1 child). On average, the annual admission revenue is $5.25M. A 46% increase would mean $2.4M or NT$77M (total over 5M attendence);
  
• alternatively, a NT$10 increase in ticket (supported by the new pandas) would mean NT$35M net increase in revenue, or NT$17M in net profit, if one assume the same volume and cost of NTD18M
  
• It was also estimated that, if among the visitors 1M people purchase memorabia at the average of NT$100 per person, then 10% loyalty would produce additional NT$10M for Taipei Zoo (This business plan is quite amusing, it assumed $1M donation to Panda Fund in China and is still profitable. However, the plan is quite aggressive and it even contemplates selling “Panda Sex Video”)

Panda bureaucracy/bickering

As for what Taiwan’s Agriculture Commission need to evaluate, see this from US FWS for reference. I do not see the excuses panda-politicizers provide. One should also note that the weather in HK is just as humid and hot as that in Taiwan (San Diego is dry and hot), and the 2 pandas had been living happily for over 6 years in Ocean Park.

Conclusion: it is not difficult to see the economics works very well, especially if China is not asking for donation to the Panda Fund (unlike the case for the US zoos). It also shows that all the excuses rejecting the pandas are very lame ones.

Categories:

• taiwan
• business
• pol
• science