The Econometric SocietyEdited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262
Econometrica: Jan, 2024, Volume 92, Issue 1
https://doi.org/10.3982/ECTA18436
p. 29-60
Evan Herrnstadt, Ryan Kellogg, Eric Lewis
Oil and gas leases between mineral owners and extraction firms typically specify a date by which the firm must either drill a well or lose the lease. These deadlines are known as primary terms. Using data from the Louisiana shale boom, we first show that well drilling is substantially bunched just before the primary term deadline. This bunching is not necessarily surplus‐reducing: using an estimated model of firms' drilling and input choices, we show that primary terms can increase total surplus by countering the effects of leases' royalties, as royalties are a tax on revenue and delay drilling. These benefits are reduced, however, when production outcomes are sensitive to drilling inputs and when drilling one well indefinitely extends the period of time during which additional wells may be drilled. We enrich the model to consider mineral owners' lease offers and find small effects of primary terms on owners' revenue.
Evan Herrnstadt, Ryan Kellogg, and Eric Lewis
In this data appendix, we discuss: (1) our data sources; (2) how we estimate well decline and the present value of well cumulative production; (3) how we clean lease data and match leases to units; and (4) how we match wells to Haynesville units.
Evan Herrnstadt, Ryan Kellogg, and Eric Lewis
The replication package for this paper is available at https://doi.org/10.5281/zenodo.10012820. The authors were granted an exemption to publish parts of their data because either access to these data is restricted or the authors do not have the right to republish them. Therefore, the replication package only includes the codes and the parts of the data that are not subject to the exemption. However, the authors provided the Journal with (or assisted the Journal to obtain) temporary access to the restricted data. The Journal checked the provided and restricted data and the codes for their ability to reproduce the results in the paper and approved online appendices.
March 5, 2024
The terms of the Editors of the Econometric Society's three journals end June 30, 2025. We are pleased to announce the incoming Editors and to thank the outgoing Editors for their excellent and continuing service.
Econometrica: Since 2019, Guido Imbens has served as the 14th Editor of Econometrica. On July 1, 2025, Marina Halac will become the Editor.
Quantitative Economics: Stéphane Bonhomme has been the Editor of Quantitative Economics since 2021. His successor will be Bernard Salanié.
Theoretical Economics: The Editor of Theoretical Economics since 2021 has been Simon Board. Taking over for him in July 2025 will be Federico Echenique.
Guido, Stéphane, and Simon have been outstanding Editors. We are grateful to them for the work they have done and will continue to do, and we look forward to further congratulating them next year. We believe Marina, Bernard, and Federico will be outstanding successors and we thank them in advance for their service.
Finally, we are grateful to Larry Samuelson for chairing all three search committees, and we thank the search committee members for their hard and fruitful work:
Econometrica: Christian Dustmann, Lars Hansen, Alessandro Lizzeri, George Mailath, Ariel Pakes, Helene Rey, and Elie Tamer.
QE: Kate Ho, Michael Keane, Felix Kubler, Whitney Newey, and Frank Schorfheide.
TE: Jeff Ely, Johannes Horner, Gilat Levy, Meg Meyer, and Ran Spiegler.
