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Valuing mineral stocks and depletion in green national income accounts

Published online by Cambridge University Press:  01 February 2000

GRAHAM A. DAVIS  and
DAVID J. MOORE
GRAHAM A. DAVIS
Affiliation:
Division of Economics and Business, Colorado School of Mines, Golden, CO 80401, Tel. (303) 273 3550, Fax (303) 273 3416, email: [email protected]
DAVID J. MOORE
Affiliation:
Financial Risk Management, PricewaterhouseCoopers, New York, NY
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Abstract

This paper investigates the theory and practice of adjusting national income and product accounts for the stock and depletion of mineral assets. These green income adjustments can have a significant impact on the accounts of mineral-based developing economies and the macroeconomic policies that might be derived from these accounts. We propose that the popular methods used to adjust the accounts for the impacts of mineral assets and depletion are upwardly biased, and we present alternative stock valuation and depletion formulas that are empirically supported variants of the formulas currently in use.

Type
Research Article
Information
Environment and Development Economics , Volume 5 , Issue 1 , February 2000 , pp. 109 - 127
Copyright
© 2000 Cambridge University Press

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Footnotes

This research is supported in part by the NSF/EPA Partnership for Environmental Research, Grant No. R824705–01–0, and was undertaken while Moore was a graduate student at the Colorado School of Mines. We thank Robert Cairns for stimulating discussions on the Hotelling valuation principle and its use in green income accounting. The managing editor and two anonymous referees also provided many valuable comments.