Arbeitspapier

Does the Oil Price Adjust Optimally to Oil Field Discoveries?

The Hotelling rule argues that the price for a non-renewable resource adjusts to the shadow value of the resource, reflecting its remaining availability. This study provides an empirical test of this hypothesis. It investigates whether the price of crude oil does adjust to unexpected news about oil field discoveries. The observed price reaction is compared with a prediction of the price decline as derived from the Hotelling model. This study finds evidence for an adjustment of the price to news about greater resource availability: the price of crude oil declines on average by 0.88% on discovery days. The degree of adjustment to the new level of scarcity is not found to differ significantly from the social optimum. Thus, there is evidence for the existence of a shadow cost component - a necessary pre-requisite for the Hotelling rule to hold.

Sprache
Englisch

Erschienen in
Series: Economics Working Paper Series ; No. 12/169

Klassifikation
Wirtschaft
Nonrenewable Resources and Conservation: Demand and Supply; Prices
Energy: Demand and Supply; Prices
Agricultural Finance
Thema
Non-renewable resources
Oil Price
Exhaustible Resources
Ölpreis
Exploration
Erdölvorkommen
Hotelling-Regel
Welt

Ereignis
Geistige Schöpfung
(wer)
Leinert, Lisa
Ereignis
Veröffentlichung
(wer)
ETH Zurich, CER-ETH - Center of Economic Research
(wo)
Zurich
(wann)
2012

DOI
doi:10.3929/ethz-a-007572167
Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Leinert, Lisa
  • ETH Zurich, CER-ETH - Center of Economic Research

Entstanden

  • 2012

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