Resource Economics

ECO439 Resource Economics

Autumn 2021

  • Topics

    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
    • Economics of oil and gas exploitation
      • Extraction
      • Taxation
    • Non-renewable resource wealth and sustainability
      • Economic growth
      • Wealth management
    • Emission regulation: prices or quantities?
    • The economics of water resources 
    • The economics of rotation: forests and fish

  • Learning outcome

    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

    General competence

    • Applying economic insights to analyze real world challenges related to resource economics

  • Teaching

    Plenary lectures.

    Lectures will be filmed (and streamed if the classroom has the equipment) 

  • Required prerequisites

    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


  • Assessment

    Portfolio (30%) assessment of individual assignments submitted during the semester, such as homework assignments. The assignments are posted throughout the semester (January-April) and the students are given roughly three weeks to complete each task. The assignments must be written in English.

    Exam (70%): Individual digital home exam, 4 hours, in English. The questions will be similar to those asked in Portfolio, but will be difficult. 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 understandings of concepts and models. 

  • Grading Scale

    Grading scale A-F on the course as a whole and A-F on the two sub-elements.

  • Literature

    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 2021.

Course responsible

Postdoctoral Fellow Keita Abe, Department of Economics.

Professor Emeritus Rögnvaldur Hannesson, Department of Economics.