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The Economics of Managing Scarce Water Resources

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  • Sheila M. Olmstead
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    Abstract

    This article surveys the literature on the economics of water scarcity and water demand. We examine demand estimation in diverted uses (urban, agricultural, and industrial), as well as the demand for instream uses such as recreation and habitat preservation. The article also assesses what is known about efficient water pricing, water allocation, and water trading within and across sectors. The literature examining the efficiency and distributional impacts of large water projects such as dams for irrigation and hydroelectric power is also discussed. Water conservation is examined from the perspective of efficiency and cost-effectiveness. We highlight water management issues to which economics has made important contributions, as well as areas where further research is needed. Copyright 2010, Oxford University Press.

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    Bibliographic Info

    Article provided by Association of Environmental and Resource Economists in its journal Review of Environmental Economics and Policy.

    Volume (Year): 4 (2010)
    Issue (Month): 2 (Summer)
    Pages: 179-198

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    Handle: RePEc:oup:renvpo:v:4:y:2010:i:2:p:179-198

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    Citations

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    Cited by:
    1. Hendricks, Nathan P. & Peterson, Jeffrey M., 2012. "Fixed Effects Estimation of the Intensive and Extensive Margins of Irrigation Water Demand," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(1), April.
    2. Vollaro, M. & Zavalloni, M. & Raggi, M. & Viaggi, D., 2013. "Potential for water use right market development in Italy: social acceptability in the context of climate change," 2013 Second Congress, June 6-7, 2013, Parma, Italy 149912, Italian Association of Agricultural and Applied Economics (AIEAA).
    3. repec:ags:jrapmc:122312 is not listed on IDEAS
    4. Hassan, Roger, 2013. "A Thirst for Efficiency: Finding the Relationship between Water Trading and Agricultural Water Use Efficiency in the Murray-Darling Basin," 2013 Conference (57th), February 5-8, 2013, Sydney, Australia 152156, Australian Agricultural and Resource Economics Society.
    5. Erik Ansink & Hans-Peter Weikard, 2013. "Composition Properties in the River Claims Problem," Tinbergen Institute Discussion Papers 13-199/VIII, Tinbergen Institute.
    6. Brent, Daniel A., 2013. "The Value of Heterogeneous Property Rights: The Costs of Water Volatility," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149698, Agricultural and Applied Economics Association.
    7. R. Quentin Grafton & Michael B. Ward & Hang To & Tom Kompas, 2011. "Determinants of Residential Water Consumption: Evidence and Analysis from a Ten-country Household Survey," Crawford School Research Papers 1114, Crawford School of Public Policy, The Australian National University.
    8. Truong, Chi H. & Drynan, Ross G., 2013. "Capacity sharing enhances efficiency in water markets involving storage," Agricultural Water Management, Elsevier, vol. 122(C), pages 46-52.
    9. Dupont, Diane P., 2011. "Reclaimed Wastewater and the WTP to avoid Summer Water Restrictions: Incorporation Endogenous Free-riding Beliefs," 85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK 108778, Agricultural Economics Society.
    10. Abbott, Joshua K. & Allen Klaiber, H., 2013. "The value of water as an urban club good: A matching approach to community-provided lakes," Journal of Environmental Economics and Management, Elsevier, vol. 65(2), pages 208-224.
    11. Ansink, Erik & Weikard, Hans-Peter, 2013. "Composition properties in the river claims problem," MPRA Paper 51618, University Library of Munich, Germany.
    12. Erik Ansink & Harold Houba, 2010. "Market Power in Water Markets," Tinbergen Institute Discussion Papers 10-054/1, Tinbergen Institute, revised 16 May 2011.

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