Optimal control approach to the taxation of exhaustible resources
Thesis/Dissertation
·
OSTI ID:6028189
The effects of taxes on the behavior of a profit maximizing firm which explores and produces an exhaustible resource, are analyzed in an optimal control framework. Specifically, a severance tax, a royalty, a profit tax, and various partial expensing provisions are considered for competitive and monopolistic market structures. The producer's response to these taxes is studied and the dead-weight losses from the taxes are calculated. The case of extraction from a fixed reserve base and a variable reserve base are taken separately but the study concentrates on the simultaneous nature of the extraction and exploration decisions. Time paths of exploratory effort, extraction and prices are computed. Two formulations are developed. The first is based on a model of Pindyck. The second formulation assumes a Cobb-Douglas production function for exploration and the current extraction decisions. It is shown that, in this dynamic partial equilibrium process, severance taxes and royalties induce the producer to reduce production and exploration and cause a shift in the time path for prices, similar to the static results.
- OSTI ID:
- 6028189
- Country of Publication:
- United States
- Language:
- English
Similar Records
Taxation of petroleum production in Nigeria
Taxation, depletion, and welfare: A simulation study of the US petroleum resource
Effects of the Crude Oil Windfall Profits Tax
Thesis/Dissertation
·
Wed Dec 31 23:00:00 EST 1980
·
OSTI ID:6310232
Taxation, depletion, and welfare: A simulation study of the US petroleum resource
Journal Article
·
Sun Feb 28 23:00:00 EST 1993
· Journal of Environmental Economics and Management; (United States)
·
OSTI ID:6695933
Effects of the Crude Oil Windfall Profits Tax
Thesis/Dissertation
·
Thu Dec 31 23:00:00 EST 1981
·
OSTI ID:5458174