The Colorful Side of Giant Panda Economics

We can thank former first lady Pat Nixon for the Washington Zoo’s giant pandas. Sitting next to Zhou Enlai during her husband’s historic 1972 visit to China, Mrs. Nixon said the pandas pictured on a tin of cigarettes were cute. The Chinese premier offered to send her some. “Cigarettes?” replied Mrs. Nixon. ‘No, Pandas,” Zou replied,

The rest of the story is some very expensive panda history.

Giant Pandas

During April, 1972, Hsing-Hsing and Ling-Ling arrived at the Smithsonian National Zoo. Everyone hoped they would mate. Experts though tell us that because Hsing-Hsing was exceedingly inept and Ling-Ling was bad-tempered, they had little success. The zoo tried artificial insemination.  It flew in a male surrogate from London (with whom Ling-Ling fought). None of the five cubs that she eventually delivered lived long after their birth.

Panda spending included “anesthesiologists, semen specialists, veterinarians, and other specialists.” In addition a panda enclosure can cost $8 million. They also eat a huge amount of pricey fresh bamboo. As a result their annual upkeep runs hundreds of thousands of dollars–five times more than elephants. And we should also note that China charges zoos rent for leased pandas.

Our Bottom Line: Thinking at the Margin

As always, economists think at the margin. Defined as the extra a decision creates, businesses are always aware of the margin. When they hire extra workers, they don’t want their marginal cost to exceed their marginal revenue. Similarly, zoos think at the margin about pandas. They have to compare revenue from extra visitors to the cost.

Perhaps though, the benefit of a panda cannot be quantified…like this video of seeing them play:

My sources and more: I started thinking about pandas after listening to this sidedoor podcast, “The Sex Lives of Giant Pandas.” From there, I found panda articles in The Washington Post, here, here,..and here Finally, completing the picture, the BBC told about the cost.