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Estimating Irrigation Water Value Using Hedonic Price Analysis: A Case Study in Malheur County, Oregon

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  • John Faux
  • Gregory M. Perry

Abstract

Hedonic price analysis is applied to agricultural land sales to reveal the implicit market price of water in irrigation. This provides price information, where otherwise absent, which can facilitate reallocation of water supplies to meet growing demands. The failure to include available information on soil quality, an important determinant of agricultural land value, results in erroneous conclusions. Joint testing of heteroskedasticity and functional form is demonstrated. The value of irrigation water in this location is estimated at $9 for an acre-foot on the least productive land irrigated, and up to $44 per acre-foot on the most productive land.

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Bibliographic Info

Article provided by University of Wisconsin Press in its journal Land Economics.

Volume (Year): 75 (1999)
Issue (Month): 3 ()
Pages: 440-452

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Handle: RePEc:uwp:landec:v:75:y:1999:i:3:p:440-452

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Web page: http://le.uwpress.org/

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Cited by:
  1. Arthur Grimes & Andrew Aitken, 2008. "Water, Water Somewhere: The Value of Water in a Drought-Prone Farming Region," Working Papers, Motu Economic and Public Policy Research 08_10, Motu Economic and Public Policy Research.
  2. Sengupta, Sanchita & Osgood, Daniel E., 2002. "Valuation Of Ranchette Amenities: A Hedonic Approach," 2002 Annual Meeting, July 28-31, 2002, Long Beach, California, Western Agricultural Economics Association 36547, Western Agricultural Economics Association.
  3. Yoo, James & Simonit, Silvio & Connors, John P. & Maliszewski, Paul J. & Kinzig, Ann P. & Perrings, Charles, 2013. "The value of agricultural water rights in agricultural properties in the path of development," Ecological Economics, Elsevier, Elsevier, vol. 91(C), pages 57-68.
  4. Beckhusen, Julia & Mullen, Jeffrey D., 2006. "A Modern Application of Hedonics for Valuing Irrigation," 2006 Annual meeting, July 23-26, Long Beach, CA, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 21189, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  5. Jeanne DACHARY-BERNARD (UR ADBX, CEMAGREF) & Sandrine LYSER (UR ADBX, CEMAGREF) & Frédéric GASCHET (GREThA, CNRS, UMR 5113) & Guillaume POUYANNE (GREThA, CNRS, UMR 5113) & Stéphane VIROL (GREThA, C, 2011. "Real Estate and Land Values on the shoreline: a transaction-level analysis (In French)," Cahiers du GREThA, Groupe de Recherche en Economie Théorique et Appliquée 2011-07, Groupe de Recherche en Economie Théorique et Appliquée.
  6. Savage, Jeffrey & Ifft, Jennifer, 2013. "Does Pumping Pay: Groundwater Management Institutions and Cropland Values in Nebraska?," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C., Agricultural and Applied Economics Association 150581, Agricultural and Applied Economics Association.
  7. Jeanne Dachary-Bernard & Frédéric Gaschet & Sandrine Lyser & Guillaume Pouyanne & Stéphane Virol, 2011. "L’impact de la littoralisation sur les marchés fonciers. Une approche comparative des côtes basque et charentaise," Économie et Statistique, Programme National Persée, Programme National Persée, vol. 444(1), pages 127-154.
  8. Pullen, Jennifer L. & Colby, Bonnie G., 2008. "Influence of Climate Variability on the Market Price of Water in the Gila-San Francisco Basin," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, Western Agricultural Economics Association, vol. 33(3), December.
  9. Shrestha, Ram K. & Alavalapati, Janaki R.R., 2004. "Effect of Ranchland Attributes on Recreational Hunting in Florida: A Hedonic Price Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, Southern Agricultural Economics Association, vol. 36(03), December.
  10. Latruffe , Laure & Ay, Jean-Sauveur, 2013. "The Empirical Content of the Present Value Model: A survey of the instrumental uses of farmland prices," Factor Markets Working Papers, Centre for European Policy Studies 165, Centre for European Policy Studies.
  11. Yoo, James & Simonit, Silvio & Connors, John P. & Kinzig, Ann P. & Perrings, Charles, 2014. "The valuation of off-site ecosystem service flows: Deforestation, erosion and the amenity value of lakes in Prescott, Arizona," Ecological Economics, Elsevier, Elsevier, vol. 97(C), pages 74-83.
  12. Mukherjee, Monobina & Schwabe, Kurt A., 2012. "Valuing Access To Multiple Water Supply Sources In Irrigated Agriculture With A Hedonic Pricing Model," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington, Agricultural and Applied Economics Association 124604, Agricultural and Applied Economics Association.
  13. Storm, Hugo & Heckelei, Thomas & Heidecke, Claudia, 2010. "Demand Estimation for Irrigation Water in the Moroccan Drâa Valley using Contingent Valuation," Discussion Papers, University of Bonn, Institute for Food and Resource Economics 162895, University of Bonn, Institute for Food and Resource Economics.
  14. Snyder, Stephanie A. & Kilgore, Michael A. & Hudson, Rachel & Donnay, Jacob, 2008. "Influence of purchaser perceptions and intentions on price for forest land parcels: A hedonic pricing approach," Journal of Forest Economics, Elsevier, Elsevier, vol. 14(1), pages 47-72, January.
  15. 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., Agricultural and Applied Economics Association 149698, Agricultural and Applied Economics Association.
  16. Johanna Choumert & Pascale PHELINAS, 2014. "Determinants of agricultural land values in Argentina," Working Papers, HAL halshs-01027502, HAL.
  17. Britt, Megan L. & Ramirez, Octavio A. & Carpio, Carlos E., 2002. "Effects Of Quality Considerations And Climate/Weather Information On The Management And Profitability Of Cotton Production In The Texas High Plains," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, Southern Agricultural Economics Association, vol. 34(03), December.
  18. Ma, Shan & Swinton, Scott M., 2011. "Valuation of ecosystem services from rural landscapes using agricultural land prices," Ecological Economics, Elsevier, Elsevier, vol. 70(9), pages 1649-1659, July.
  19. Sengupta, Sanchita & Osgood, Daniel Edward, 2003. "The value of remoteness: a hedonic estimation of ranchette prices," Ecological Economics, Elsevier, Elsevier, vol. 44(1), pages 91-103, February.
  20. Philippe Le Goffe & Julien Salanié, 2005. "Le droit d’épandage a-t-il un prix ? Mesure sur le marché foncier," Cahiers d'Economie et Sociologie Rurales, INRA Department of Economics, INRA Department of Economics, vol. 77, pages 36-64.

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