Measuring natural resource scarcity: Theory and practice

Concern over the implications of natural resource availability for economic well-being has been among the most long-lived policy issues involving economists. Scarcity and Growth by Barnett and Morse has remained the most influential evaluation of these issues. The purpose of this paper is to evaluate the Barnett-Morse methodology. Using the results from comparative static and dynamic models three scarcity indexes are evaluated for their consistency in signaling changes in the availability of natural resources. In addition, the paper reports a reconsideration of the movements in the relative prices of extractive outputs to 1973. This analysis indicates that the empirical evidence alone is not sufficient to arrive at a conclusion as to whether there is increasing scarcity of natural resources.