Natural Resource Prices: Will They Ever Turn Up?

Berck, Peter; Roberts, Michael J.

doi:10.1006/jeem.1996.0032

Cited by 83 publications

(94 citation statements)

References 11 publications

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“…Preliminary analysis indicates that annual data lead to a weak GARCH effect and to difficulty in convergence of Results of recent studies based on annual data are mixed. Berck and Roberts (1996) and Ahrens and Sharma (1997) find stochastic trends across a menu of unit root tests. Allowing for multiple breaks, Lee, List, and Strazicich (2006) report a deterministic trend.…”

Section: Garch and Fourier Methodologymentioning

confidence: 99%

A Note on the Oil Price Trend and GARCH Shocks

Li¹,

Thompson²

2010

The Energy Journal

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Section: Garch and Fourier Methodologymentioning

confidence: 99%

A Note on the Oil Price Trend and GARCH Shocks

Li¹,

Thompson²

2010

The Energy Journal

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“…50 Rather than test the precise numerical implications of a model that we know must be unrealistic-particularly in the presence of shocks along the equilibrium path-we simply ask whether crude oil production from existing wells responds at all to prices in the way that a model adopting 50 Smith (1979), Slade (1982), and Berck and Roberts (1996) find limited evidence for an upward trend in exhaustible resource prices, but tests based on price alone are not correctly specified unless extraction costs are negligible. Structural econometric papers estimating in-situ values, including Miller and Upton (1985), Halvorsen and Smith (1984), Black and LaFrance (1998), and Thompson (2001), find mixed results.…”

Section: Impacts Of Unanticipated Demand Shocksmentioning

confidence: 99%

Hotelling Under Pressure

Anderson¹,

Kellogg

Salant

2014

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We show that oil production from existing wells in Texas does not respond to price incentives. Drilling activity and costs, however, do respond strongly to prices. To explain these facts, we reformulate Hotelling's (1931) classic model of exhaustible resource extraction as a drilling problem: firms choose when to drill, but production from existing wells is constrained by reservoir pressure, which decays as oil is extracted. The model implies a modified Hotelling rule for drilling revenues net of costs and explains why production is typically constrained. It also rationalizes regional production peaks and observed patterns of price expectations following demand shocks.

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“…Table 1 presents summary statistics. We supplement price data for some minerals with longer-term time trends from Berck and Roberts [2]. See Appendix B for a detailed description of the data.…”

Section: Empirical Analysismentioning

confidence: 99%