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Monopoly Power and Distribution in Fragmented Markets: The Case of Groundwater

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  • Hanan G. Jacoby
  • Rinku Murgai
  • Saeed Ur Rehman

Abstract

This paper examines monopoly power in the market for groundwater (irrigation water extracted by private tubewells), a market characterized by barriers to entry and spatial fragmentation. In Pakistan's Punjab region, groundwater and tenancy contracts are often interlinked, with share-tenants gaining access to water through the use of their landlord's tubewell. An analysis of groundwater transactions shows that tenants of tubewell owners are charged lower prices than other customers. Tubewell owners and their tenants also use considerably more groundwater on their plots than other farmers. Using detailed price and quantity data, the efficiency and distributional implications of this monopoly power are explored. Copyright 2004, Wiley-Blackwell.

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File URL: http://hdl.handle.net/10.1111/j.1467-937X.2004.00304.x
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Bibliographic Info

Article provided by Oxford University Press in its journal The Review of Economic Studies.

Volume (Year): 71 (2004)
Issue (Month): 3 ()
Pages: 783-808

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Handle: RePEc:oup:restud:v:71:y:2004:i:3:p:783-808

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  1. Abhijit Banerjee & Dilip Mookherjee & Kaivan Munshi & Debraj Ray, 2001. "Inequality, Control Rights, and Rent Seeking: Sugar Cooperatives in Maharashtra," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 109(1), pages 138-190, February.
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  5. Meinzen-Dick, Ruth Suseela, 1996. "Groundwater markets in Pakistan: participation and productivity," Research reports, International Food Policy Research Institute (IFPRI) 105, International Food Policy Research Institute (IFPRI).
  6. Basu, Kaushik & Bell, Clive, 1991. "Fragmented duopoly : Theory and applications to backward agriculture," Journal of Development Economics, Elsevier, Elsevier, vol. 36(2), pages 145-165, October.
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Cited by:
  1. Azam, Jean-Paul & Rinaudo, Jean-Daniel, 2004. "Encroached Entitlements: Corruption and Appropriation of Irrigation Water in Southern Punjab (Pakistan)," IDEI Working Papers, Institut d'Économie Industrielle (IDEI), Toulouse 252, Institut d'Économie Industrielle (IDEI), Toulouse.
  2. Kristiana Hansen & Jonathan Kaplan & Stephan Kroll, 2014. "Valuing Options in Water Markets: A Laboratory Investigation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 57(1), pages 59-80, January.
  3. Mukherji, Aditi, 2007. "The energy-irrigation nexus and its impact on groundwater markets in eastern Indo-Gangetic basin: Evidence from West Bengal, India," Energy Policy, Elsevier, Elsevier, vol. 35(12), pages 6413-6430, December.
  4. A.Banerji & Gauri Khanna & J.V. Meenakshi, 2006. "Markets, Institutions And Efficiency Groundwater Irrigation In North India," Working papers, Centre for Development Economics, Delhi School of Economics 152, Centre for Development Economics, Delhi School of Economics.
  5. repec:dgr:uvatin:2010054 is not listed on IDEAS
  6. Watto, Muhammad Arif & Mugera, Amin William, 2013. "Measuring Groundwater Irrigation Efficiency in Pakistan: A DEA Approach Using the Sub-vector and Slack-based Models," Working Papers, University of Western Australia, School of Agricultural and Resource Economics 144943, University of Western Australia, School of Agricultural and Resource Economics.
  7. Gauri Khanna, 2006. "Technical Efficiency in Production and Resource Use in Sugar Cane: A Stochastic Frontier Production Function Analysis," IHEID Working Papers, Economics Section, The Graduate Institute of International Studies 15-2006, Economics Section, The Graduate Institute of International Studies.
  8. Zhang, Lijuan & Wang, Jinxia & Huang, Jikun & Rozelle, Scott, 2008. "Development of Groundwater Markets in China: A Glimpse into Progress to Date," World Development, Elsevier, Elsevier, vol. 36(4), pages 706-726, April.
  9. Abhijit Banerji & Gauri Khanna & J. V. Meenakshi, 2010. "Social Contracts, Markets And Efficiency -- Groundwater Irrigation In North India," Working papers, Centre for Development Economics, Delhi School of Economics 183, Centre for Development Economics, Delhi School of Economics.
  10. Sheila M. Olmstead, 2010. "The Economics of Managing Scarce Water Resources," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(2), pages 179-198, Summer.
  11. Erik Ansink & Harold Houba, 2010. "Market Power in Water Markets," Tinbergen Institute Discussion Papers, Tinbergen Institute 10-054/1, Tinbergen Institute, revised 16 May 2011.
  12. Tao Chen & Gautam Tripathi, 2014. "A simple consistent test of conditional symmetry in symmetrically trimmed tobit models," CREA Discussion Paper Series, Center for Research in Economic Analysis, University of Luxembourg 14-04, Center for Research in Economic Analysis, University of Luxembourg.
  13. Siwan Anderson, 2011. "Caste as an Impediment to Trade," American Economic Journal: Applied Economics, American Economic Association, American Economic Association, vol. 3(1), pages 239-63, January.
  14. Watto, Muhammad, 2013. "Measuring Groundwater Irrigation Efficiency in Pakistan: A DEA Approach Using the Sub-vector and Slack-based Models," 2013 Conference (57th), February 5-8, 2013, Sydney, Australia, Australian Agricultural and Resource Economics Society 152204, Australian Agricultural and Resource Economics Society.
  15. Banerji A & Meenakshi J V & Gauri Khanna, 2007. "Groundwater Irrigation in North India: Institutions and Markets," Working Papers id:899, eSocialSciences.

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