Whither Hotelling: Tests of the Theory of Exhaustible Resources

Posted: 16 Sep 2011

See all articles by Margaret E. Slade

Margaret E. Slade

University of British Columbia (UBC)

Henry Thille

University of Guelph - College of Social and Applied Human Sciences - Department of Economics

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Date Written: October 2009

Abstract

We review the empirical literature that extends and tests the Hotelling model of the optimal depletion of an exhaustible resource. The theory is briefly described to set the stage for the review of empirical tests and applications. Those tests can be roughly divided into two broad categories — descriptive and structural — and we discuss the strengths and weaknesses of each before presenting the empirical studies of optimal extraction under conditions of exhaustibility. We also discuss some econometric pitfalls that applied researchers face when attempting to test the model.

Suggested Citation

Slade, Margaret E. and Thille, Henry, Whither Hotelling: Tests of the Theory of Exhaustible Resources (October 2009). Annual Review of Resource Economics, Vol. 1, Issue 1, pp. 239-260, 2009, Available at SSRN: https://ssrn.com/abstract=1928357 or http://dx.doi.org/10.1146/annurev.resource.050708.144223

Margaret E. Slade (Contact Author)

University of British Columbia (UBC) ( email )

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Henry Thille

University of Guelph - College of Social and Applied Human Sciences - Department of Economics ( email )

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