Valuing Access To Multiple Water Supply Sources In Irrigated Agriculture With A Hedonic Pricing Model
AbstractIncreasing aridity, more frequent and intense drought, and greater degrees of water scarcity create unique challenges for agriculture. In response to these challenges, which often manifest themselves in the form of lower and more variable surface water supplies as well as depleted and degraded ground water supplies, growers are apt to seek out opportunities to adapt. One option confronting growers to reduce their exposure to water scarcity and heightened uncertainty is to diversify. Indeed, having access to a portfolio of supplies is one way in which water and irrigation districts as well as individual growers are responding to the changing landscape of water resource availability. The objective of this paper is to evaluate the benefits to irrigated agriculture from having access to multiple water supply sources, i.e., a water portfolio. With farm-level information on approximately 2000 agricultural parcels across California, we use the hedonic property value method to investigate the extent growers’ benefit from having access to multiple sources of water (i.e., a water portfolio). Our results suggest that while lower quality waters, less reliable water, and less water all negatively impact agricultural land values, holding a water portfolio has a positive impact on land values through its role in mitigating the negative aspects of these factors and reducing the sensitivity of agriculture to climate-related factors. From a policy perspective, such results identify a valuable adaptation tool that water and irrigation districts may consider to help offset the negative impacts of climate change, drought, and population increases on water supply availability and reliability.
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Bibliographic InfoPaper provided by Agricultural and Applied Economics Association in its series 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington with number 124604.
Date of creation: 2012
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Non-market Valuation; Hedonics; Multiple Water Supply Sources; Water Districts; Groundwater; Spatial Econometrics; Agricultural and Food Policy; Environmental Economics and Policy; Q51; Q15; Q18;
Find related papers by JEL classification:
- Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
- Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
This paper has been announced in the following NEP Reports:
- NEP-AGR-2012-06-25 (Agricultural Economics)
- NEP-ALL-2012-06-25 (All new papers)
- NEP-ENV-2012-06-25 (Environmental Economics)
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