The Use of Econometric Models in Mineral Policy Formulation

The use of econometric models to assess the effects of a Government's policy on an industry is gaining momentum. This is particularly so for the Mineral Industry and it is important that mineral industry management understands the techniques involved in developing econometric models. Models are usually constructed outside the industry by either government departments or their consultants and used by the policy makers to investigate artificially the implementation and ramifications of new policies. This paper discusses the application of econometric models in Governmental policy determination, highlights the use of various models in Australia and gives an overview of the techniques involved using Australian examples.