Econometric model of the domestic copper and aluminum industries: the effects of higher energy prices and declining ore quality on metal substitution and recycling

Thesis/Dissertation · Mon Jan 01 00:00:00 EST 1979

OSTI ID:5860322

Slade, M E

This study is an attempt to measure the short-to-mid-term (ten-year) consequences of rising energy prices and falling ore quality for two domestic mineral industries - copper and aluminum - by considering inter- and intra-metal-market relationships. To make quantitative estimates of metal production, consumption, substitution, and the potential for recycling as cost factors change, an econometric model of each industry was constructed. The models are linked by copper and aluminum prices, the derived demand for copper and aluminum from the copper-aluminum-using sectors of the US economy, and the elasticities of substitution in each sector. Primary prices determination in each industry is based on a full-cost model that emphasizes long-run average cost. In contrast, in the secondary industries, firms take price as given and produce to equate price with their short-run marginal cost. The econometric models were estimated using annual time-series data from the period 1954-76. To forecast the short-to-mid-term consequences of higher energy prices and falling ore quality for copper and aluminum prices, market shares, and the fraction of consumption of each that comes from recycled metal, the model is simulated over the 1977-86 period. Alternate assumptions about future energy prices and ore quality are made in order to test the sensivitity of domestic copper and aluminum markets to changing cost factors. In addition, some changes in world metal markets, such as the formation of a profit-maximizing bauxite cartel, are simulated.

• OSTI ID: 5860322
• Resource Relation: Other Information: Thesis (Ph. D.)
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING
POLICY AND ECONOMY
MATERIAL SUBSTITUTION
ECONOMIC ELASTICITY
MINERAL INDUSTRY
ECONOMIC ANALYSIS
ALUMINIUM
COPPER
ENERGY
MARGINAL-COST PRICING
MARKET
PRICES
ECONOMICS
ELEMENTS
INDUSTRY
METALS
TRANSITION ELEMENTS
290200* - Energy Planning & Policy- Economics & Sociology
290400 - Energy Planning & Policy- Energy Resources