20 lines
994 B
TeX
20 lines
994 B
TeX
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\begin{frame}{Oil and Gas Production: Econometric Model }
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\begin{block}{Estimated model}
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\begin{equation}
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Q_{O,b,t}=\beta_{1} Q_{O,b,t-1}+\beta_{2} P_{WTI,t-1}+\beta_{3} P_{HH,t-1}+\beta_{4}\theta_{t}+\gamma_{t,b}+\epsilon_{b,t}
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\end{equation}
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\end{block}
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Where \(Q_{O,b,t}\) is the net present oil produced in a basin state pair b, at time t, \(P_{WTI}\) is the West Texas Intermediate futures price, \(P_{HH}\) is the futures price of the Henry Hub spot market, \(\theta_{t}\) is a month dummy, and \(\gamma_{b,t}\) is a variable that represents the amount of monetary damage from natural disasters.\footnote{(Gilbert and Gavin, 2020)}\newline
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\textbf{Three-stage least squares is used with instruments of:}
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\begin{enumerate}
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\item{Oil refinery shocks}
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\item{Natural gas storage shocks}
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\item{Regional population weighted cooling and heating degree days}
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\item{Sum of the standard deviation of each instrument over the preceding 12 months}
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\end{enumerate}
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\end{frame}
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