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Accounting for Resource Depletion: A Microeconomic Approach

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  • Cairns, Robert D

Abstract

The theoretical basis of a practical method of accounting for depletion of mineral resources is presented. Rent rises at the rate of interest, but depletion does not. Rent is equal to the sum of depletion and depreciation less any opportunity cost of present production as compared to waiting. Depletion follows a path which is dependent on the depreciation formula chosen by the accountant. The approach is compared to the methods proposed by the BEA in 1994. Copyright 2000 by The International Association for Research in Income and Wealth.

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  • Cairns, Robert D, 2000. "Accounting for Resource Depletion: A Microeconomic Approach," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(1), pages 21-31, March.
  • Handle: RePEc:bla:revinw:v:46:y:2000:i:1:p:21-31
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    Cited by:

    1. Robert Cairns, 2001. "Capacity Choice and the Theory of the Mine," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 129-148.
    2. Mona Ray, 2014. "Redefining the Human Development Index to Account for Sustainability," Atlantic Economic Journal, Springer;International Atlantic Economic Society, pages 305-316.
    3. Cairns, Robert D., 2001. "Seeing the trees as a forest: what counts in green accounting," Ecological Economics, Elsevier, vol. 36(1), pages 61-69, January.
    4. Butterfield, David W., 2003. "Resource depletion under uncertainty: implications for mine depreciation, Hartwick's Rule and national accounting," Resource and Energy Economics, Elsevier, vol. 25(3), pages 219-238, August.
    5. Robert Cairns, 2004. "Green Accounting for an Externality, Pollution at a Mine," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 409-427.
    6. Nicholas Z. Muller & Robert Mendelsohn & William Nordhaus, 2011. "Environmental Accounting for Pollution in the United States Economy," American Economic Review, American Economic Association, pages 1649-1675.

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