ECO439 Resource Economics
The course addresses the following topics:
- Static and dynamic optimization methods
- Non-renewable resources in an inter-temporal perspective
- The competitive Hotelling model
- Imperfect competition in non-renewable resource markets
- Theoretical and applied models of common property resources, especially fisheries, including:
- Management of common property resources
- The role of property rights
- Over-exploitation and extinction
- The economics of water resources
- The economics of forestry resources
- The Faustmann model, results and applications
- Forestry resources and land use
- Carbon sequestration
- Deforestation and economic development
- Trade and resource use
- The resource curse
- Various special topics, such as regulatory enforcement and compliance in resource industries, social norms and resource use, economic growth and sustainability and the economics of global warming,
This course examines the operation of markets for natural resources including minerals, fossil fuels, fish, forest resources, and water. Physical processes determine natural resource abundance, and the course will introduce students to such processes. Students will learn that this link to natural processes is what sets natural resource economics apart from other fields. The course will make students familiar with economic theories of exploitation of renewable and non-renewable resources, especially the inter-temporal aspect of resource extraction and strategic issues arising from competition among a limited number of agents. Examples of the latter include strategic interaction in resource markets (oil and minerals), sharing of common fish stocks among countries, and environmental problems such as climate change. The course also deals with natural resource regulations and the implications of various regulations on economic behavior.
The course will enable students to:
- Use and understand simple biological models for studying fishery and forest resources, geological concepts for examining oil and minerals, and hydrological concepts for examining groundwater.
- Understand various incentive margins that affects behavior in resource extraction and resource markets, and how regulations affected them.
- Set up and solve static and dynamic optimization problems.
- Formulate, analyze and interpret economic models of resource markets and extraction analytically using differential and integral calculus.
- Formulate, analyze and interpret economic models of resource markets and extraction numerically using Excel's Solver or similar tools
The course makes use of mathematical optimization methods and microeconomic theory. Students should have skills similar to those obtained from ECO401.
Credit reduction due to overlap
Starting from the autumn semester 2017 this course cannot be combined with ENE429
Requirements for course approval
- Exam (70%): A four-hour,written school exam (grading scale A-F).
- Portfolio (30%) assessment of assignments submitted during the semester, such as homework assignments and in-class quizzes (grading scale A-F)
Change in assessment from spring 2019. Students retaking the course, will need to take both assessment elements.
Grading scale A-F on the course as a whole and A-F on the two sub-elements.
Textbook: Conrad, J.M. "Resource Economics." 2nd edition. Cambridge University Press, 2010.
Journal articles: Selected papers from academic journals.
- ECTS Credits
- Teaching language
Spring. Offered spring 2019
Lassi Ahlvik, Keita Abe, Department of Economics.
Corbett Grainger, University of Wisconsin - Madison