PREFACE

Summary

A book on the economics of exhaustible resources requires no justification. A long book does. We had originally planned to write a monograph on the subject, more in keeping with the design of the Handbook Series, of which this volume is a member. Had we pursued this approach we would have been forced to assume a knowledge of resource allocation theory, and the book would have applied this directly to the subject matter at hand. But the subject has recently attracted the attention of mathematicians, physicists, engineers, biologists and systems analysts as well, and we wanted to write for them too.

There was in fact another reason. Even the best graduate texts on resource allocation theory are often dry, and it is not uncommon for economics students to fail to see what questions such economic theorizing is designed to answer and why they might be worth asking. It occurred to us that exhaustible natural resources provide one with particularly good examples for illustrating resource allocation theory. There is therefore a good deal of interchange between resource allocation theory and its application to exhaustible resources in the chapters that follow. We have often raised a question that appears naturally to arise when one thinks of such resources, developed the relevant analysis in a more general context, and then gone back to address ourselves to the question we had originally asked. This second reason explains why we have attempted to write a text on resource allocation theory at the same time.