Where Pandanomics Costs Too Much

Finland decided that Lumi and Pyry have to return to China. They were just too expensive.

Pandanomics

Approximately six years ago, Lumi and Pyry arrived in their new (temporary) home. The two giant pandas were to have been the guests of the Ähtäri Zoo in central Finland for a 15-year visit. In return–we are not sure of the amount–zoos usually pay China a million dollar annual fee. But, we do know that the zoo spent $9.5 million on their new Panda House and, close to $1.7 million annually on energy, staff, and maintenance. But the whopper, at $223,000 a year, was bamboo. Giant Pandas eat 26 to 84 pounds of bamboo each day.

With 280,000 people visiting the Ähtäri Zoo during the pandas’ first year, they expected panda revenue to cover the cost. However, we had a pandemic, reduced tourism, and inflation fueled by the Ukraine war. Combining the unexpected with the zoo’s location–a two hour drive from any major city–their revenue projections did not nearly work out. Still, cub inspired traffic would have saved them but the pandas did not breed. (Panda breeding has been a problem since the first pair arrived in Washington’s Smithsonian National Zoo. Then. described in Smithsonian Magazine, “Hsing-Hsing adopted ‘bizarre positions [that] made procreation impossible,’ while Ling-Ling “stood on her head.”)

Our Bottom Line: Zoo Economics

During 2019, China had pandas at 26 zoos in 18 countries:

As businesses, zoos are unusual. Except for panda fees, they do not buy their inventory. Instead, since the 1970s, they barter and borrow their wildlife. The goal is to avoid putting a price tag on an animal.

But still zoos need money for staff, maintenance, food, and other typical business expenses. Meanwhile, also like typical businesses, they try to optimize revenue from admissions. Finland did have the pop in revenue at first.

Knowing that pandas are zoos most expensive residents, as economists, we can ask if they are worth it. Thinking of tradeoffs, we hit the problem of the unquantifiable. There is huge value in the panda conservation that zoo fees provide China. Also, we cannot place a dollar value on the joy of seeing pandas play:

My sources and more: Thanks to yesterday’s NY Times for alerting me to the Ähtäri Zoo’s pandanomics plight. Next, returning to last year’s econlife post, The Conversation, and Smithsonian Magazine, we had most of what we needed. Then, this article on zoo economics completed the picture. (Please note that my map’s statistics said 18 countries but elsewhere, I’ve read that the total was 21.  Also, please note that sectione of “Our Bottom Line” were in a previous econlife post.)