Water Markets and Third-Party Effects
AbstractWe examine potential third-party effects arising from trading water from one region (rural) to another (urban). Using labor, water and heterogeneous land, rural agents produce a traded agricultural good and nontraded service good. Absent job market frictions, increased water trading improves per capita regional welfare, but aggregate service income can increase (decrease) while individual land rents decrease (increase). If labor experiences job market frictions, water trading can trigger socially inefficient land fallowing, and a decrease in per capita regional welfare. Simulation results confirm the no-job-market-friction model predictions. Copyright 2008, Oxford University Press.
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Bibliographic InfoArticle provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.
Volume (Year): 90 (2008)
Issue (Month): 4 ()
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Other versions of this item:
- Bourgeon, Jean-Marc & Easter, K. William & Smith, Rodney B.W., 2006. "Water Markets and Third Party Effects," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25616, International Association of Agricultural Economists.
- Bourgeon, Jean-Marc & Easter, K. William & Smith, Rodney B.W., 2004. "Water Markets And Third Party Effects," 2004 Annual meeting, August 1-4, Denver, CO 20231, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
- Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
- R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
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- Jason Henderson & Maria Akers, 2008. "Can markets improve water allocation in rural America?," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 97-117.
- Marianne LEFEBVRE & Lata GANGADHARAN & Sophie THOYER, 2011. "Do Security-differentiated Water Rights Improve Efficiency?," Working Papers 11-14, LAMETA, Universtiy of Montpellier, revised Jun 2012.
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