The impact of institutional variables on measures of resource scarcity

This dissertation examines annual price data of two resources, copper and zinc, to test the hypothesis that these resources have become more scarce during the years 1870 to 1985. A theoretical model is developed which incorporates the effects of endogenous technological change and monopolistic market structure on resource prices over time. The empirical results make three important contributions toward measuring resource scarcity over a long time period. First, more appropriate statistical models are employed, than have been developed in the past, to obtain more robust conclusions regarding the trend of resource scarcity. Second, important non-cost institutional variables--cartels, wars, and depressions--are modeled as intervention variables to test whether they have exerted a significant impact on the trend of resource prices. Lastly, this research tests whether major technological advancements introduced in the early 20th century have altered the trend of resource prices.