Geology or Economics? Testing Models of Irreversible Investment Using North Sea Oil Data

摘要: This paper tests the main implications of models irreversible investment using data from operations in oil fields North Sea. Discrete-time hazard regression are used to ascertain influence economic variables, expected price oil, variance and level reserves, on lag between discovery a field decision develop field. We able control for heterogeneity by incorporating variables which account both geological features each individual operator characteristics. The results indicate that reserves important influencing appraisal duration but is not. Variables capturing non-economic also found be significant factors affecting lag. Copyright 1994 Royal Economic Society.