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Effect of US Policies on Offshore Oil Leasing, 1983-2006: A Random Parameter Logit Regression Analysis

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  • Brett R. Gelso
  • John C. Whitehead

Abstract

The purpose of this study is to determine the effects of Minerals Management Service policy on Outer Continental Shelf leasing between 1983 and 2006. We apply a discrete choice model to a large, recently-developed spatial data set and focus on the effect of increased royalties on offshore production. We focus on offshore policies subsequent to 1983 with a flexible Random Parameters Logit model. Oil prices, net income, distance, geographical proxies and weather variables influence bidding in expected ways. We include the second moment of parameter distributions to avoid erroneous conclusions about the effects of government policy on bidding. Key Words: Random Parameter Logit, Oil Policy, Outer Continental Shelf

Suggested Citation

  • Brett R. Gelso & John C. Whitehead, 2008. "Effect of US Policies on Offshore Oil Leasing, 1983-2006: A Random Parameter Logit Regression Analysis," Working Papers 08-03, Department of Economics, Appalachian State University.
    • Handle: RePEc:apl:wpaper:08-03
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    File URL: http://econ.appstate.edu/RePEc/pdf/wp0803.pdf
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    References listed on IDEAS

    as
    1. Douglas K. Reece, 1978. "Competitive Bidding for Offshore Petroleum Leases," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 369-384, Autumn.
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    3. Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D. With contributions by-Name:Adamowicz,Wiktor, 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304.
    4. Louviere, Jordan J, 2001. "What If Consumer Experiments Impact Variances as Well as Means? Response Variability as a Behavioral Phenomenon," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 28(3), pages 506-511, December.
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    Keywords

    random parameter logit; oil policy; outer continental shelf;
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