Nonrenewable resources, fiscal distortions, and risk effects

Thesis/Dissertation · Fri Jan 01 00:00:00 EST 1988

OSTI ID:5191940

Wingate, S R

Fiscal systems applied to resource-development projects serve not only to distribute ex post rents between the firm and government, but also to distribute project risk between the parties. Further, when fiscally induced distortions in firm behavior are present, fiscal systems influence the probability of project payouts and thus the risk characteristics of the project. This study provides a framework in which alternative fiscal systems may be evaluated with attention paid jointly to fiscal distortions, risk sharing, and fiscal risk effects. The framework is based on firms and a government that are self-interested and risk-averse, but allows for evaluation of alternative fiscal systems from the perspective of an altruistic risk-averse social planner. Specification of preference functions of the firms and government beyond strict concavity (risk aversion) is avoided by use of the concept of second-degree stochastic dominance. Application of the framework is illustrated by consideration of operating profit and gross revenue taxes within a model of oil-pool development. In simulations of the model, both the operating profits and gross revenue taxes are fond to increase project risk when judged from a social perspective and against a benchmark risk-preserving tax; and the profit tax is riskier than the revenue tax.

• Research Organization: Oregon Univ., Eugene, OR (USA)
• OSTI ID: 5191940
• Resource Relation: Other Information: Thesis (Ph. D.)
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING
POLICY AND ECONOMY
ENERGY SOURCE DEVELOPMENT
ECONOMETRICS
PETROLEUM INDUSTRY
RESOURCE DEPLETION
TAX CREDITS
RESOURCE DEVELOPMENT
ECONOMIC ANALYSIS
RISK ASSESSMENT
SIMULATION
ECONOMICS
INDUSTRY
290400* - Energy Planning & Policy- Energy Resources
294002 - Energy Planning & Policy- Petroleum