Whither Hotelling: Tests of the Theory of Exhaustible Resources

Margaret Slade () and Henry Thille

Annual Review of Resource Economics, 2009, vol. 1, issue 1, 239-259

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.

Keywords: Hotelling model; optimal extraction; empirical tests; oil and gas; nonfuel minerals (search for similar items in EconPapers)
JEL-codes: L71 L72 Q30 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (48)

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