National parks in East Africa: Veblen goods?

At a lunch today I got the chance to listen to a short talk from the head of the Kenya Wildlife Service (KWS). Dr. Julius Kipng'etich joined KWS in 2005 and has transformed the parastatal into a serious business outfit. In a bid to ensure world class parks, Kip has greatly improved management while giving conservation a strong scientific approach. As recognition of his achievements, Kip was the winner of the acclaimed CEO of the Year Award, COYA 2009.

Kip made a couple of interesting points in his speech that I’d like to reiterate here. He noted that, historically, wildlife parks tended to price too low. This did not allow them to become self-sustainable nor earn the revenue needed to build high quality infrastructure and invest in ecological conservation. In recent years this has changed. In Rwanda they started by charging some $50 to see the mountain gorillas. They then upped the price to $100 and were surprised to see demand increase. Incrementally they increased the price to $150, then $200… today it costs $500 to spend one hour in close proximity to these rare mountain gorillas. And demand is higher than ever. You sometimes have to book weeks, if not months in advance.

Similarly, Kip increased entry prices across the board for Kenya’s various wildlife parks. Today it costs a foreigner some $60 per day just to enter some of Kenya’s better parks, a 300% increase from a couple of years back. Prices for locals have increased as well. And KWS revenues are at their highest ever since independence. When prices were much lower, he noted, the local middle class rarely went.

Which raises an interesting research angle: are national parks that are home to rare animals Veblen goods? And, if so, why? Is it a status effect? A signal of quality?

I would ask my friends well-versed in economics to weigh-in here. Wikipedia defines a Veblen good as one for which “peoples' preference for buying them increases as a direct function of their price” but makes no prediction for “what will happen to actual quantity of goods demanded”. So maybe this isn’t a Veblen good. I don’t think it’s Giffen either is it?