Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

Fairness Measures and Importance Weights for Allocating Quotas to OPEC Member Countries

Ahmad Saleh Alsalem, Subhash C. Sharma and Marvin D. Troutt
The Energy Journal
Vol. 18, No. 2 (1997), pp. 1-21
Stable URL: http://www.jstor.org/stable/41322728
Page Count: 21
  • Subscribe ($19.50)
  • Cite this Item
Fairness Measures and Importance Weights for Allocating Quotas to OPEC Member Countries
Preview not available

Abstract

This study considers what we call the "degree of optimality" of quota assignments for each OPEC member country based on certain proposed "fairness" factors. We argue that these factors should ideally be based on energy and economic conditions that ought to be taken into consideration when production quotas are assigned. Thus, in this study, importance weights based on proven reserves, available productive capacity, GDP per capita and domestic investment needs are first obtained for allocating fair quotas to each member country in the period 1982-1990. Then a degree of fairness optimality index is computed for each member country and is applied to measure the performance of these countries during the quota system period. Our investigations reveal that OPEC appears to give greater importance to the energy factors, proved reserves and productive capacity, although domestic investment needs seem to play a significant role in determining the direction of quota assignments. Statistical tests reveal that all the weights are consistent over time. Finally, we observe that the member countries whose ideal quotas are based on low GDP per capita have higher degrees ofoptimality than those whose ideal quotas are based on proven reserves or available productive capacity. The computed importance weights and optimality measures can be used both by OPEC and energy analysts interested in OPEC behavior.

Page Thumbnails

  • Thumbnail: Page 
1
    1
  • Thumbnail: Page 
2
    2
  • Thumbnail: Page 
3
    3
  • Thumbnail: Page 
4
    4
  • Thumbnail: Page 
5
    5
  • Thumbnail: Page 
6
    6
  • Thumbnail: Page 
7
    7
  • Thumbnail: Page 
8
    8
  • Thumbnail: Page 
9
    9
  • Thumbnail: Page 
10
    10
  • Thumbnail: Page 
11
    11
  • Thumbnail: Page 
12
    12
  • Thumbnail: Page 
13
    13
  • Thumbnail: Page 
14
    14
  • Thumbnail: Page 
15
    15
  • Thumbnail: Page 
16
    16
  • Thumbnail: Page 
17
    17
  • Thumbnail: Page 
18
    18
  • Thumbnail: Page 
19
    19
  • Thumbnail: Page 
20
    20
  • Thumbnail: Page 
21
    21