Date of Award
2021
Document Type
Dissertation
Degree Name
Ph.D.
Organizational Unit
Daniels College of Business
First Advisor
Tracy Xu
Second Advisor
Jack Strauss
Third Advisor
Ronald Rizzuto
Keywords
Asset pricing, Hotelling, Natural resources, Oil and gas
Abstract
The Hotelling Valuation Principal (HVP) implies that the value per unit of an in-ground exhaustible natural resource is equal to the current price less the cost of production. The assumptions required for this principle include a certain and homogenous reserve stock, unconstrained extraction, and constant costs. Extensive research has empirically investigated the HVP. This paper expands the HVP framework and relaxes the theory’s assumptions to account for reserve differentials. The results show that the original net price model is more closely aligned with developed reserve value, than total reserve value. In addition, this paper develops two- and three-factor net price models to incorporate user cost, extraction capacity and the risk of developing and producing oil and gas reserves.
Publication Statement
Copyright is held by the author. User is responsible for all copyright compliance.
Rights Holder
Brian K. Hicks
Provenance
Received from ProQuest
File Format
application/pdf
Language
en
File Size
75 pgs
Recommended Citation
Hicks, Brian K., "The Hotelling Valuation Principle: Does User Cost and Reserve Differentials Improve Validity?" (2021). Electronic Theses and Dissertations. 1943.
https://digitalcommons.du.edu/etd/1943
Copyright date
2021
Discipline
Finance, Economics