Natural Resource Economics

University of Delaware
Newark, Delaware

Instructor: Mackenzie, John
Subject area: Economics
Department: Economics
Course number: 424
Year taught: 1997
Comments: See web page for links to full documents of lecture notes.

Please note that the copyright for this syllabus is retained by the instructor.

Overview: The major focus of this course is the positive analysis of allocative efficiency: under what conditions to markets cause resources to flow to their highest-valued uses at the most appropriate times? What conditions make market allocations inefficient? How can these inefficiencies be corrected? These are largely "positive" economic questions, since we can develop and apply objective measures of economic efficiency.

Text: Tietenberg, Tom. 1996. Environmental & Resource Economics (4th ed.). Scott-Foresman, NY.


1.Resource Scarcity, Discounting and Public Goods
2.Intro to Resource Allocation
3.Multi-Period Resource Allocation
4.Forest Rotation Management
5.Open-Access Fishery Model
6.Allocation of Water

6 written assignments (12 percent each): Final exam (28 percent).
+/- used within 2 points of deciles; curve only to raise grades: ~N(C+, 0.8 SD/letter grade)

Course Objectives:

At the end of this course you should understand how competitive market processes generally yield efficient allocations of resources through time and between alternative uses; how various market failures arise and affect allocative efficiency; and how economic policies can correct for these failures.

No late work will be accepted for any reason. Assignments must be computer-printed or typed.

Class Schedule

February 11: introduction; efficiency, equity and sustainability
February 13: resource/environment linkages; forecasting the future: pessimists vs. optimists Chs. 1 and 2

February 18: a taxonomy of market failures: property rights, externalities and public goods Ch. 3
February 20: the Coase Theorem; transactions costs; government failure

February 25: welfare measures; discounting
February 27: fundamentals of benefit/cost analysis; measuring non-market benefits Ch. 4

March 4: economics of risk; innumeracy
March 6: population and economic development Ch. 5

March 11: development, poverty and the environment Ch. 21
March 13: defining resource reserves; intro to resource allocation models Ch. 6

March 18:
March 20: dynamic resource allocation models

March 25: more on exhaustible resources Ch. 7
March 27: energy markets; the rise and fall of OPEC

* * * * * SPRING BREAK * * * * *

April 8: economics of recycling and solid waste management Ch. 8
April 10: water resources: surface and groundwater; allocation doctrines Ch. 9

April 15: optimal water allocation strategies and political impediments to them.
April 17: agricultural resources: food scarcity hypotheses; price and production trends; agricultural policies Ch. 10

April 22: forest resources: single-rotation and multi-rotation models Ch. 11
April 24: economics of forest depletion in LDC's; biodiversity and global warming; forest protection

April 29: fisheries: defining optimal yield; depletion of open-access fisheries Ch. 12
May 1: fishery management policies

May 6: resource scarcity reexamined: indicators and trends Ch. 13
May 8: economics of pollution control Ch. 14

May 13: US pollution control policies: water pollution ; air pollution ; toxic waste ; global pollution issues
May 15: sustainability revisited Ch. 22

May 20: course wrap-up Ch. 23

May 27: FINAL EXAM, 10:30--12:30 AM