IDEAS home Printed from https://ideas.repec.org/p/ags/queddp/275216.html

Measuring Resource Scarcity in Non-renewable Resources with Inequality Constrained Estimation

Author

Listed:
  • Sadorsky, P. A.

Abstract

In this paper annual Canadian exploration data are used to estimate a multiple-output translog exploration cost function. A new definition of depletion is introduced and its estimated coefficient is found to be statistically significant. Another novel feature is the application of Monte Carlo integration to ensure the estimated cost function satisfies concavity and monotonicity. The *fitted cost function parameters are then used to obtain estimates of the marginal costs of exploration for oil and gas. Our estimated marginal exploration costs are smaller than previous* studies' because we have allowed for technical progress which offsets the depletion effects. These marginal cost estimates are employed, along with previous estimates of exploration rents, to measure resource scarcity. We find some evidence for the increased scarcity of oil and gas in Alberta- • For oil there is a 10.07. per year increase in scarcity along' the trend line while for natural gas there is a 1.87. per year increase in scarcity along, the Crend line.

Suggested Citation

  • Sadorsky, P. A., 1989. "Measuring Resource Scarcity in Non-renewable Resources with Inequality Constrained Estimation," Queen's Institute for Economic Research Discussion Papers 275216, Queen's University - Department of Economics.
    • Handle: RePEc:ags:queddp:275216
    DOI: 10.22004/ag.econ.275216
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/275216/files/QUEENS-IER-PAPER-746.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.275216?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Geweke, John, 1986. "Exact Inference in the Inequality Constrained Normal Linear Regression Model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(2), pages 127-141, April.
    2. Pierre Lasserre, 1985. "Discovery Costs as a Measure of Rent," Canadian Journal of Economics, Canadian Economics Association, vol. 18(3), pages 474-483, August.
    3. John R. Livernois, 1988. "Estimates of Marginal Discovery Costs for Oil and Gas," Canadian Journal of Economics, Canadian Economics Association, vol. 21(2), pages 379-393, May.
    4. Brown, Gardner M, Jr & Field, Barry C, 1978. "Implications of Alternative Measures of Natural Resource Scarcity," Journal of Political Economy, University of Chicago Press, vol. 86(2), pages 229-243, April.
    5. Adrian R Pagan & Anthony D Hall, 1983. "Diagnostic tests as residual analysis," Published Paper Series 1983-1, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
    6. Diewert, W. E. & Avriel, M. & Zang, I., 1981. "Nine kinds of quasiconcavity and concavity," Journal of Economic Theory, Elsevier, vol. 25(3), pages 397-420, December.
    7. Fuss, Melvyn & McFadden, Daniel, 1978. "Production Economics: A Dual Approach to Theory and Applications (I): The Theory of Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 1, number fuss1978.
    8. Fuss, Melvyn & McFadden, Daniel, 1978. "Production Economics: A Dual Approach to Theory and Applications (II): Applications of the Theory of Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 2, number fuss1978a.
    9. Devarajan, Shantayanan & Fisher, Anthony C, 1982. "Exploration and Scarcity," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1279-1290, December.
    10. Chalfant, James & White, Kenneth, 1987. "Estimation and Testing in Demand Systems with Concavity Constraints," CUDARE Working Papers 198466, University of California, Berkeley, Department of Agricultural and Resource Economics.
    11. Fuss, Melvyn & McFadden, Daniel (ed.), 1978. "Production Economics: A Dual Approach to Theory and Applications," Elsevier Monographs, Elsevier, edition 1, number 9780444850133.
    12. Diewert, Walter E & Wales, Terence J, 1987. "Flexible Functional Forms and Global Curvature Conditions," Econometrica, Econometric Society, vol. 55(1), pages 43-68, January.
    13. Burgess, David F., 1975. "Duality theory and pitfalls in the specification of technologies," Journal of Econometrics, Elsevier, vol. 3(2), pages 105-121, May.
    14. White, Kenneth J, 1978. "A General Computer Program for Econometric Methods-Shazam," Econometrica, Econometric Society, vol. 46(1), pages 239-240, January.
    15. Spanos,Aris, 1986. "Statistical Foundations of Econometric Modelling," Cambridge Books, Cambridge University Press, number 9780521269124, January.
    16. Denny, Michael & Pinto, Cheryl, 1978. "An Aggregate Model with Multi-Product Technologies," Histoy of Economic Thought Chapters, in: Fuss, Melvyn & McFadden, Daniel (ed.),Production Economics: A Dual Approach to Theory and Applications, volume 2, chapter 9, McMaster University Archive for the History of Economic Thought.
    17. Godfrey, Leslie G, 1978. "Testing against General Autoregressive and Moving Average Error Models When the Regressors Include Lagged Dependent Variables," Econometrica, Econometric Society, vol. 46(6), pages 1293-1301, November.
    18. Halvorsen, Robert & Smith, Tim R, 1984. "On Measuring Natural Resource Scarcity," Journal of Political Economy, University of Chicago Press, vol. 92(5), pages 954-964, October.
    19. Engle, Robert F, 1982. "Autoregressive Conditional Heteroscedasticity with Estimates of the Variance of United Kingdom Inflation," Econometrica, Econometric Society, vol. 50(4), pages 987-1007, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Barnett, William A. & Serletis, Apostolos, 2008. "Consumer preferences and demand systems," Journal of Econometrics, Elsevier, vol. 147(2), pages 210-224, December.
    2. Bjarne Jensen & Paul Boer & Jan Daal & Peter Jensen, 2011. "Global restrictions on the parameters of the CDES indirect utility function," Journal of Economics, Springer, vol. 102(3), pages 217-235, April.
    3. Caroline Khan & Mike G. Tsionas, 2021. "Constraints in models of production and cost via slack-based measures," Empirical Economics, Springer, vol. 61(6), pages 3347-3374, December.
    4. McDonald, John & Snooks, G. D., 1986. "Domesday Economy: A New Approach to Anglo-Norman History," OUP Catalogue, Oxford University Press, number 9780198285243.
    5. Ryu, Hang Keun, 2011. "Subjective model selection rules versus passive model selection rules," Economic Modelling, Elsevier, vol. 28(1-2), pages 459-472, January.
    6. Griffiths, William E. & O'Donnell, Christopher J. & Cruz, Agustina Tan, 2000. "Imposing regularity conditions on a system of cost and factor share equations," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 44(01), pages 1-21.
    7. Baccar, Sourour, 1995. "Reliability of the Translog Cost Function : Some Theory & an Application to the Demand of Energy in French Manufacturing," MPRA Paper 53987, University Library of Munich, Germany.
    8. Ryu, Hang Keun, 2011. "Subjective model selection rules versus passive model selection rules," Economic Modelling, Elsevier, vol. 28(1), pages 459-472.
    9. Michaelides, Panayotis G. & Vouldis, Angelos T. & Tsionas, Efthymios G., 2010. "Globally flexible functional forms: The neural distance function," European Journal of Operational Research, Elsevier, vol. 206(2), pages 456-469, October.
    10. Guenter Lang, 2002. "Innovative Slowdown, Productivity Reversal? - Estimating the Impact of R&D on Technological Change," Discussion Paper Series 218, Universitaet Augsburg, Institute for Economics.
    11. Ivaldi, Marc & McCullough, Gerard, 2005. "Welfare Trade-Offs in US Rail Mergers," CEPR Discussion Papers 5000, C.E.P.R. Discussion Papers.
    12. Perekhozhuk, Oleksandr, 2007. "Marktstruktur und Preisbildung auf dem ukrainischen Markt für Rohmilch," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 41, number 92322.
    13. Yaryna Kolomiytseva, 2018. "Revisiting Transformation and Directional Technology Distance Functions," Papers 1812.10108, arXiv.org.
    14. Hertel, Thomas W. & Peterson, Everett B. & Surry, Yves & Preckel, Paul V. & Tsigas, Marinos E., "undated". "Implicit Additivity as a Strategy for Restricting The Parameter Space in CGE Models," 1990 Annual meeting, August 5-8, Vancouver, Canada 270868, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Sauer, J., . "Monotonicity and Curvature – A Bootstrapping Approach," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 42.
    16. Guy Chapda Nana & Bruno Larue, 2014. "Imposing curvature conditions on flexible functional forms for GNP functions," Empirical Economics, Springer, vol. 47(4), pages 1411-1440, December.
    17. Eswaramoorthy, K., 1991. "U.S. livestock production and factor demand: a multiproduct dynamic dual approach," ISU General Staff Papers 1991010108000010523, Iowa State University, Department of Economics.
    18. Lin, C.Y. Cynthia, 2009. "An Empirical Dynamic Model of OPEC and Non-OPEC," Working Papers 225895, University of California, Davis, Department of Agricultural and Resource Economics.
    19. Ilko Vranki? & Mira Krpan & Jasminka ?ohinger, 2019. "Economic Analysis of Technology and Properties of Legendre-Fenchel Transformations," International Journal of Economic Sciences, International Institute of Social and Economic Sciences, vol. 8(2), pages 159-183, December.
    20. Ludo Peeters & Yves Surry, 2000. "Incorporating Price-Induced Innovation in a Symmetric Generalised McFadden Cost Function with Several Outputs," Journal of Productivity Analysis, Springer, vol. 14(1), pages 53-70, July.

    More about this item

    Keywords

    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:queddp:275216. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/qedquca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.