Accounting Price of an Exhaustible Resource: A Comment

In a paper titled "Wealth Accounting, Exhaustible Resources and Social Welfare", Hamilton and Ruta (Environ Resour Econ 42(1):53-64, 2009) derived accounting price for an exhaustible resource in Eq. (18), in the so-called "El Serafy economy" (El Serafy in Environmental accounting for sustainable development. The World Bank, Washington, 1989). However, the result is not plausible since they improperly replace constant extraction in the value of the resource stock (Eq. 17) with current resource stock divided by reserve life in their derivation. In the short comment, I show that the accounting price should be the same as the unit "user cost" defined by El Serafy (Environmental accounting for sustainable development. The World Bank, Washington, 1989).