Living Economics

From Seahorses to Viagra
Viagra and other similar western impotence remedies might have affected the demand for and prices of traditional substitutes.

According to a Pfizer-funded study, the sales of seal penises (believed by some as an impotence remedy) in Canada dropped from about 40,000 in 1996 to 20,000 in 1998, the year Viagra hit Western markets. In the U. S., the market for Alaskan reindeer antlers, believed to enhance sexual potency, declined by 72% in 1999 (Newsweek). In two years since 1998, the cost of a single seal penis fell from as much as $100 Canadian to $15 - $20 (Commercial Appeal).

This story, if true, is a textbook example of how the prices of and demand for substitutes are closely related. Namely, with a cheaper substitute such as Viagra, the demand for and the prices of more expensive traditional remedies go down.

But things are never quite that simple. Another report published by a nonprofit conservation group showed that the world trade in reindeer antlers, sea cucumbers, and sea horses - all believed by some Asians to be impotence remedies - rose sharply after a brief dip that coincided with Viagra's 1998 market entry (Newsweek). Seahorses in particular are believed to be a cheaper substitute to Viagra. In 2001, global consumption of medicinal seahorses reached 70 metric tons (about 25 million seahorses), compared to just 45 metric tones seven years earlier. Because of the heavy demand, 34 species have been included in the endangered list (SCMP 5/24/2004).

So it is possible the heightened publicity about impotence remedies promoted by Viagra has stimulated a demand for cheaper alternatives such as seahorses. Again a textbook example of how the prices of and demand for close substitutes are closely related. Namely, with a more expensive substitute as Viagra, the demand for and the price of less expensive substitute go up.

Whether Viagra or other competing western drugs have in fact reduced the threat to endangered animals or not, it still pays to advertise that "The tiger is back1" (SCMP 4/30/2005). After all, having a slice of the world market for impotence remedies estimated to be worth US$6 is not exactly chump change.

Note:
  1. Tiger penises are also believed by some Asians to be an impotence remedy.
  2. Tiger penises are also believed by some Asians to be an impotence remedy.
References:
  • Commercial Appeal 12/29/2002. "Viagra saves lives of endangered animals used in folk tonics."
  • Newsweek 4/19/2004. "The Viagra wars."
  • SCMP (South China Morning Post) 4/30/2005. "Growl and groan with wonder drug."
  • SCMP (South China Morning Post) 5/24/2004. "Endangered sex-boosting seahorses given a lifebuoy."
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