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The Transition to Uncontrolled Crude Oil Prices

Montgomery, W. David (1977) The Transition to Uncontrolled Crude Oil Prices. Social Science Working Paper, 186. California Institute of Technology , Pasadena, CA. (Unpublished)

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The purpose of this paper is to outline some initial steps toward the construction of an adequate dynamic analysis of oil price controls. A precise description of the goals and structure of current price controls is provided. These controls are characterized in a dynamic model that generates estimates of efficiency losses and wealth transfers. A simple dynamic model of oil production is also developed. The dynamic model leads to 2 conclusions: (1) in the short-term, continued controls are likely to lead to larger rates of domestic crude oil production than would exist if controls were removed; and (2) a multi-part pricing system that is neutral in its effects on production decisions in a static context is not neutral in a dynamic model.

Item Type:Report or Paper (Working Paper)
Additional Information:Prepared for the National Bureau of Economic Research Conference on Public Regulation, Washington D.C., December 15-17, 1977. Published as Montgomery, David. Transition to uncontrolled crude oil prices. Conference paper No. 69. No. CONF-771290-1. National Bureau of Economic Research, Inc., Cambridge, MA (USA), 1980.
Group:Social Science Working Papers
Subject Keywords:Petroleum, energy planning policy and economy, deregulation, dynamic programming, mathematical models, petroleum forecasting, pricing regulations, production, energy sources, fossil fuels, fuels programming, regulations
Series Name:Social Science Working Paper
Issue or Number:186
Record Number:CaltechAUTHORS:20171024-133932030
Persistent URL:
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:82620
Deposited By: Jacquelyn Bussone
Deposited On:24 Oct 2017 20:56
Last Modified:03 Oct 2019 18:56

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