TITLE:
Valuing Exhaustible Resource Ownership: General Equilibrium Assets-Markets versus Partial Equilibrium
AUTHORS:
Johnson Kakeu
KEYWORDS:
Conservation Finance, Arbitrageurs, General Equilibrium in Assets Markets, Partial Equilibrium, Mineral Rights Ownership, Capital Markets, Resource Conservation
JOURNAL NAME:
Theoretical Economics Letters,
Vol.8 No.5,
April
4,
2018
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.