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Luck or skill? An examination of the Ehrlich-Simon bet

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  • Kiel, Katherine
  • Matheson, Victor
  • Golembiewski, Kevin

Abstract

In 1980, Paul Ehrlich and Julian Simon placed a famous bet on whether the prices of a bundle of natural resources would rise or fall over the ensuing decade. Simon won the bet as the real price of the bundle fell significantly, and the result of this bet has been taken as proof that technological progress is likely to overcome that of any Neo-Malthusian concerns about natural resource scarcity. Contrary to the popular perception, however, an examination of the price history of the identical bundle of goods from 1900 to 2008 shows that Ehrlich and not Simon would have won a majority of the bets over the past century and would have done so by a wide margin.

Suggested Citation

  • Kiel, Katherine & Matheson, Victor & Golembiewski, Kevin, 2010. "Luck or skill? An examination of the Ehrlich-Simon bet," Ecological Economics, Elsevier, vol. 69(7), pages 1365-1367, May.
    • Handle: RePEc:eee:ecolec:v:69:y:2010:i:7:p:1365-1367
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    References listed on IDEAS

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    1. M. H. Khalil Timamy, 2005. "Debate," Review of African Political Economy, Taylor & Francis Journals, vol. 32(104-105), pages 383-393, June.
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    1. Lawn, Philip, 2010. "On the Ehrlich-Simon bet: Both were unskilled and Simon was lucky," Ecological Economics, Elsevier, vol. 69(11), pages 2045-2046, September.
    2. Gale Pooley & Marian Tupy, 2020. "Luck or insight? The Simon–Ehrlich bet re‐examined," Economic Affairs, Wiley Blackwell, vol. 40(2), pages 277-280, June.
    3. Stan Becker, 2013. "Has the World Really Survived the Population Bomb? (Commentary on “How the World Survived the Population Bomb: Lessons From 50 Years of Extraordinary Demographic History”)," Demography, Springer;Population Association of America (PAA), vol. 50(6), pages 2173-2181, December.
    4. Vincent Geloso, 2022. "Statogenic climate change? Julian Simon and Institutions," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 35(3), pages 343-358, September.

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    More about this item

    Keywords

    Natural resources Scarcity Neo-Malthusian;

    JEL classification:

    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices

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