Valuing Exhaustible Resource Ownership: General Equilibrium Assets-Markets versus Partial Equilibrium ()
ABSTRACT
This paper uses a general equilibrium assets-markets
approach with arbitrageurs for valuing mineral resource deposit ownership. The
results are contrasted with those delivered by a partial equilibrium approach.
We show that in a general equilibrium assets-markets approach, arbitrageurs’
valuation of resource deposit rights commands a discount factor that adjusts
not only for the time depreciation but also for changes in the resource stock
size over time. A general equilibrium assets-markets approach with arbitrageurs
leads to a more conservative management of exhaustible natural resources than a
partial equilibrium approach does.
Share and Cite:
Kakeu, J. (2018) Valuing Exhaustible Resource Ownership: General Equilibrium Assets-Markets versus Partial Equilibrium.
Theoretical Economics Letters,
8, 844-853. doi:
10.4236/tel.2018.85059.
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