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The Economic Value of Clarifying Property Rights: Evidence from Water in Idaho’s Snake River Basin

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  • Browne, Oliver R.
  • Ji, Xinde James

Abstract

This paper exploits a novel reform in Idaho to measure the economic value created by clarifying property rights for water. Between 1987–2014, the Snake River Basin adjudication determined who had legal rights to use water, covering 139,000 water rights and 90% of Idaho’s water use. Using differences in the timing of adjudication between different sub-basins, we find that adjudication caused a 140% increase in the frequency of water right trades and transfers; that these trades and transfers moved water to parcels of land more suitable for irrigated agriculture; that water-use intensity remains unchanged after adjudication; and that adjudication prompts irrigators, especially those owning surface water rights, to shift from lower-value to higher-value land uses. These changes create benefits with a present value of at least $402.7 million, outweighing the one-time fixed cost of $94 million Idaho spent on adjudication.

Suggested Citation

  • Browne, Oliver R. & Ji, Xinde James, 2023. "The Economic Value of Clarifying Property Rights: Evidence from Water in Idaho’s Snake River Basin," Journal of Environmental Economics and Management, Elsevier, vol. 119(C).
    • Handle: RePEc:eee:jeeman:v:119:y:2023:i:c:s0095069623000177
    DOI: 10.1016/j.jeem.2023.102799
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    More about this item

    Keywords

    Prior appropriation; Water rights adjudication; Property rights; Water markets; Snake River Basin;
    All these keywords.

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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