Many places, including the island of Oahu in Hawaii, have a number of groundwater aquifers. Consumers located in one aquifer area can be supplied from water extracted and transported from another aquifer if this results in cost savings over local extraction. Incorporating such interdistrict transport is necessary for a fully efficient allocation framework. We derive efficient water management and pricing plans for two of the four aquifer zones in the Central Oahu corridor, taking into account the possibility of inter-district water trade. Efficient management requires not only intertemporal efficiency within zones but also spatial efficiency between zones, where water is transferred from one zone to the next if, without the transfer, the intertemporal efficiency price in the receiving zone is greater than the efficiency price in the source zone plus the cost of transfer.
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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2006 Annual meeting, July 23-26, Long Beach, CA with number
21473.
Length: Date of creation: 2006 Date of revision: Handle: RePEc:ags:aaea06:21473
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