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On the Ehrlich-Simon bet: Both were unskilled and Simon was lucky

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  • Lawn, Philip

Abstract

In 1980, biologist Paul Ehrlich and economist Julian Simon entered into a bet over whether the real prices of five resources would increase or fall between 1980 and 1990. Because the real prices of the five resources declined, Simon won the bet. But Simon won, not because he was more skilled than Ehrlich, nor because he correctly predicted the changing absolute scarcity of the five relevant resources. Simon won because he was lucky. Resource prices reflect the relative scarcity of different resource types, not their absolute scarcity. Given the basis upon which Ehrlich and Simon entered the bet, both men revealed their lack of understanding of the relationship between absolute resource scarcity and resource prices. In the end, Simon was lucky because factors other than a rise in absolute scarcity had the greatest impact on resource prices between 1980 and 1990.

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  • Lawn, Philip, 2010. "On the Ehrlich-Simon bet: Both were unskilled and Simon was lucky," Ecological Economics, Elsevier, vol. 69(11), pages 2045-2046, September.
    • Handle: RePEc:eee:ecolec:v:69:y:2010:i:11:p:2045-2046
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    1. Norgaard, Richard B., 1990. "Economic indicators of resource scarcity: A critical essay," Journal of Environmental Economics and Management, Elsevier, vol. 19(1), pages 19-25, July.
    2. Daly, Herman E., 1992. "Allocation, distribution, and scale: towards an economics that is efficient, just, and sustainable," Ecological Economics, Elsevier, vol. 6(3), pages 185-193, December.
    3. Philip Lawn, 2007. "Frontier Issues in Ecological Economics," Books, Edward Elgar Publishing, number 4176.
    4. Slade, Margaret E., 1982. "Trends in natural-resource commodity prices: An analysis of the time domain," Journal of Environmental Economics and Management, Elsevier, vol. 9(2), pages 122-137, June.
    5. Herman E. Daly, 2007. "Ecological Economics and Sustainable Development, Selected Essays of Herman Daly," Books, Edward Elgar Publishing, number 12606.
    6. Kiel, Katherine & Matheson, Victor & Golembiewski, Kevin, 2010. "Luck or skill? An examination of the Ehrlich-Simon bet," Ecological Economics, Elsevier, vol. 69(7), pages 1365-1367, May.
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    1. Stan Becker, 2013. "Has the World Really Survived the Population Bomb? (Commentary on “How the World Survived the Population Bomb: Lessons From 50 Years of Extraordinary Demographic History”)," Demography, Springer;Population Association of America (PAA), vol. 50(6), pages 2173-2181, December.
    2. Pierre Desrochers & Vincent Geloso & Joanna Szurmak, 2021. "Care to Wager Again? An Appraisal of Paul Ehrlich's Counterbet Offer to Julian Simon, Part 1: Outcomes," Social Science Quarterly, Southwestern Social Science Association, vol. 102(2), pages 786-807, March.

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