The explicit treatment of the role of perceptions in modelling forecasts is uncommon. With respect to future activity levels in the UK Continental Shelf, using the flexibility of add factors in econometric forecasts, this article demonstrates that, in addition to price variations, forecasts are sensitive to perceptions about future resource discovery and recovery rates. A medium-sized multivariate system reflecting the feedback structure of the petroleum supply process was formulated, estimated, and used to forecast activity levels. (C) 2003 Elsevier Science B.V. All rights reserved.
- empirical econometric model
- perceptions of resource discovery and recovery rates
- two-way ANOVA price-perceptions sensitivity tests