Open AccessINVESTIGATING TAX DISTORTIONS: AN APPLIED MODEL OF PETROLEUM EXPLORATION AND EXTRACTION DECISIONS
Author(s) -
BLAKE ANDON J.
Publication year - 2013
Publication title -
natural resource modeling
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.28
H-Index - 32
eISSN - 1939-7445
pISSN - 0890-8575
DOI - 10.1111/j.1939-7445.2012.00121.x
Subject(s) - parameterized complexity , profit (economics) , distortion (music) , economics , renting , microeconomics , econometrics , computer science , engineering , algorithm , amplifier , computer network , civil engineering , bandwidth (computing)
A numerical model is proposed for the testing of distortions caused by petroleum fiscal systems on the exploration and extraction activities of a profit‐maximizing firm. Traditional models have not been capable of testing for the distortions caused by the complex tax structures most often used by governments. Two tax combinations, as well as certain other taxes, are analyzed for distortions in the model. The model is parameterized using generic data because specific jurisdictions are not considered. The distortions due to rentals and royalties are as expected by theory. Property taxes show a new distortion result where production tilting is ambiguous.