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The Dynamics of New Resource Projects a Progress Report


  • Kenneth W Clements

    (UWA Business School, The University of Western Australia)

  • Simon Mongey

    (UWA Business School, The University of Western Australia)

  • Jiawei Si

    (UWA Business School, The University of Western Australia)


In its widely-cited Investment Monitor, Access Economics publishes quarterly detailed information on most Australian investment projects that cost more than $5m, including a classification of projects as “possible”, “under consideration”, “committed”, “under construction”, “deleted” or “completed”. We use these rich data to show that the evolution of projects can be conveniently understood in terms of a Markov chain. This framework provides several useful summary measures of the investment system as a whole, including estimates of the probability of a project moving from one state to another over multi-period horizons, likely bottlenecks in the system, the mean time spent in each state, the expected time taken for a project to enter a certain state such as “under construction” or “completed” and the possible implications of “speeding up” the system by regulatory reform. These measures could be of value to project proponents, capital markets and policy makers.

Suggested Citation

  • Kenneth W Clements & Simon Mongey & Jiawei Si, 2010. "The Dynamics of New Resource Projects a Progress Report," Economics Discussion / Working Papers 10-05, The University of Western Australia, Department of Economics.
  • Handle: RePEc:uwa:wpaper:10-05

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    References listed on IDEAS

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