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Snake Economics

ChuckHurd

www.ChuckHurd.com
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Couple nights ago i spoke with a breeder about a pair of CB 07 Albino Eastern Diamondbacks. He quoted me his price and it was surprisingly high. I had been quoted a price for a pair in 06 that was less then half his price. Trying not to be rude about it, I explained that was a more then I expected, given I was quoted much lower the year before. He was bothered by this and wanted to know who was dropping the price. Being an economics teacher, this intrigued me and i began to think about snake economics. The price of anything in a free market economy is determined by supply and demand. The supply is, of course, provided by the breeders and the demand comes from other breeders and collectors. As with any color morph, the initial price is high, then steadily declines each year. While at premium price, the demand is supplied almost exclusively by other breeders who are looking for investment return. In other words, they are investing $5000 in an animal in hopes of that animal bringing them back the investment, plus profit. Each year more and more "investors" get the animals to the point that everyone looking to invest has the stock, then the price must nose dive to the point average collectors will be willing to pay, otherwise there is no market, in other words, no demand for the supply. Considering these are venomous snakes, i think there is a unique concern. Since the babies are not going to reproduce for at least 3 years, investors are looking at a 3 year investment before any return what so ever. as with any animal, there exists the possibility of death and a total loss of investment, but more specific to venomous reptiles, an investor must worry about new legislation. Seemly each year more states are regulating this hobby and pushing more and more breeders out of the market. Few investors are looking to tie up investment capital into a 3 year investment that may yield nothing due to death, or a fraction of the investment due to changing laws. In the world of venomous reptiles, it seems downward pressure is placed on the new morphs much faster then in the world of say ball pythons or boas.
 
I enjoyed reading your "Snake Economics" write up. I have never really understood the price determination myself. Do breeders say: "Wow we created a new morph. Lets charge $12,000." What determines that initial value for the animal?

Correct me if i'm wrong because I am certainly no economics expert. At some point in the marketplace for a specific morph, wouldn't it reach a point where the long term return would not justify the initial cost. It would no longer be an investment.

A bold prediction: Over the next decade we may see the "extinction" of some morphs in the market because they value hits rock bottom. It would look something like this:

Piebald Ball Python, Male, $65.00
 
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