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On Using Current Information To Value Hard-Rock Mineral Properties*

* This paper has been replicated

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  • Robert D. Cairns
  • Graham A. Davis

Abstract

We reformulate the "Hotelling valuation principle" to take into account the special production characteristics of hard-rock minerals. The data requirements of the revised model are still parsimonious, but the resultant valuations are some 40% below those produced by the Hotelling valuation principle. Our valuation equations are also "user-friendly," allowing the valuer to specify price and cost expectations that need not comply with the Hotelling rule. Empirically, our model provides estimates of market value for producing mineral properties that are more accurate than those produced by the Hotelling valuation principle. © 1998 by the President and Fellows of Harvard College and the Massachusetts Institute of Technolog

Suggested Citation

  • Robert D. Cairns & Graham A. Davis, 1998. "On Using Current Information To Value Hard-Rock Mineral Properties," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 658-663, November.
    • Handle: RePEc:tpr:restat:v:80:y:1998:i:4:p:658-663
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    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/003465398557744
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    Citations

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    Cited by:

    1. Witold J. Henisz & Sinziana Dorobantu & Lite J. Nartey, 2014. "Spinning gold: The financial returns to stakeholder engagement," Strategic Management Journal, Wiley Blackwell, vol. 35(12), pages 1727-1748, December.
    2. Robert Cairns, 2001. "Capacity Choice and the Theory of the Mine," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 18(1), pages 129-148, January.
    3. Roel van Veldhuizen & Joep Sonnemans, 2018. "Nonrenewable Resources, Strategic Behavior and the Hotelling Rule: An Experiment," Journal of Industrial Economics, Wiley Blackwell, vol. 66(2), pages 481-516, June.
    4. Davis, Graham A., 2001. "The Credibility of a Threat to Nationalize," Journal of Environmental Economics and Management, Elsevier, vol. 42(2), pages 119-139, September.
    5. Brian R. Copeland & M. Scott Taylor, 2017. "Environmental and resource economics: A Canadian retrospective," Canadian Journal of Economics, Canadian Economics Association, vol. 50(5), pages 1381-1413, December.
    6. repec:elg:eechap:14605_1 is not listed on IDEAS
    7. Brian R. Copeland & M. Scott Taylor, 2017. "Environmental and resource economics: A Canadian retrospective," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 50(5), pages 1381-1413, December.
    8. Margaret E. Slade & Henry Thille, 2009. "Whither Hotelling: Tests of the Theory of Exhaustible Resources," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 239-259, September.

    Replication

    This item has been replicated by:
  • Joseph Eisenhauer, 2005. "A test of Hotelling’s Valuation Principle for nonrenewable resources," Empirical Economics, Springer, vol. 30(2), pages 465-471, September.

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    1. On using current information to value hard-rock mineral properties (REStat 1998) in ReplicationWiki

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