A model of pricing of natural-resource commodities that integrates financial and product markets is derived and tested. The model unifies two strands of the economic and financial literature: one that builds on the Hotelling model of pricing of exhaustible resources and the other that extends...

The paper tests Hotelling's prediction that scarcity rent for a non-renewable resource will rise at the rate of discount in a market equilibrium. We perform the test using data for old-growth timber, a resource that is effectively non-renewable. In contrast to previous studies, for this resource...