Rabbits and Akubra Hats

(Photo: davidd)

The July issue of Qantas Magazine has an article on Akubra hats.  The company has a problem: the price of a crucial input into its hats, rabbit skins, has risen by 125 percent in the past three years due to a virus that killed many Aussie rabbits. The rabbit population has been increasing again, but its previous decline caused a much longer-run decrease in the supply of rabbit shooters, who permanently left this occupation for other jobs in this low-unemployment economy. 

These two factors—the short-run decrease in supply of rabbits and the long-run decrease in the supply of rabbit shooters—have caused a rise in Akubra’s costs and thus a decrease in supply in the related hat market. This is a nice example of a shock in one market causing a general equilibrium set of adjustments. Good for rabbits in the long run, not so good for bald guys who need hats to protect against the Australian sun!

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  1. Allie says:

    Just a point of clarification– you use the term “rabbit skins”, which might lead some readers to believe that the hats are made of tanned rabbit leather.

    According to the wiki article you cite, Akubras are actually made of felted rabbit hair– a traditional material for men’s hats in the West for the past couple of centuries, well into the 20th.

    (As a fashion designer, I’m picky about apparel terminology. Thanks for humoring me.)

    I’m sure there will be lots of vegan and animal-advocate backlash against this article, of the “good riddance” sort, but the hats’ being constructed from felted fur implies that they could in fact be made by shearing rabbits, rather than using their skins whole. Perhaps the shortage could be met by breeding rabbits for their hair, rather than hunting wild ones?

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  2. Joao says:

    Or you could by any other kind of hat, couldn’t you?

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  3. RichardTaylor says:

    Rabbits cause huge environmental damage that has a very real economic cost, estimated to be between A$200-500m p.a.! As an ex-farmer from Australia I have personal experience of try and manage rabbits and other feral species – it takes up a lot of time and resource.

    Rabbit population crashes occur reasonably frequently due to drought, myxomatosis and rabbit haemorrhagic disease (calicivirus). However as a single pair of rabbits can increase to 184 individuals in 18 months, so in theory this should not be a major problem for Akubra unless they work on slim margins or have an over-leveraged business.

    With a turnover of A$50m (at retail) if rabbit fur is too expensive Akubra could always swap to making their felt from wool (wool prices are down 15% in the last year). Fewer rabbits mean Australian farms can carry more sheep, thereby expanding supply and keeping prices competitive. What your brief analysis overlooks are two other important factors:
    - demand for rabbit meat in Australia has fallen dramatically since the 1950′s (it’s arguably healthier than chicken)
    - the number of shooters will likely continue to decrease due to an aging population and more stringent firearms ownership laws.

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