ECO439 Resource Economics
Autumn 2023Spring 2024
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 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, including fisheries.
- Economics of oil and gas exploitation
- Emission regulation: prices or quantities?
- The economics of water resources
- The economics of rotation: forests and fish
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.
- In-depth knowledge of 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
- Applying economic insights to analyze real world challenges related to resource economics
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
Assignments (30%): Two individual homework assignments will be posted during the semester which count towards the final grade. Students will have two weeks to complete the assignments.
Exam (70%): Individual digital home exam, 3 hours, in English. It is an open-book exam due to the nature of the format, but the answer will not be easily found in the slides / notes / textbooks. It requires good understanding of concepts and models.
Grading scale AF on the course as a whole and AF on the two sub-elements.
Textbook: Conrad, JM "Resource Economics." 2nd edition. Cambridge University Press, 2010.
Journal articles: Selected papers from academic journals.
- ECTS Credits
- Teaching language
Spring. Offered spring 2023.
Associate Professor Harim Kim, Department of Economics