Chapter 3: Empirical evidence on the theory of nonrenewable resource economics
The literature on the economics of nonrenewable resources has focused on modeling the long-run dynamic behavior of nonrenewable resource firms and the associated implications for markets. At the heart of the literature lies an analysis of the behavior of scarcity rent over time because of its central role in the determination of depletion and price profiles. True, market prices for nonrenewables are determined by the usual myriad of supply-side and demand-side factors, but the one factor that sets nonrenewable resource price determination apart from that in other markets is scarcity rent. Consequently, the determinants and behavior of scarcity rent has dominated the literature and captured the attention of economists. Theory predicts that scarcity rent rises at the rate of interest in the basic Hotelling (1931) model and rises less rapidly when extraction cost rises with depletion.
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.