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Implications of Current and Alternative Water Allocation Policies in the Bow River Sub Basin of Southern Alberta

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  • Ali, Md Kamar
  • Klein, Kurt K.
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    Abstract

    In this study, economic implications of allocating surface water with the existing policy (seniority rule) and three other alternative (People First, proportional reduction, and trading) policies are investigated to address potential water scarcities in the Bow River Sub Basin (BRSB) of Southern Alberta using a mathematical programming model. The model used an improved calibration technique and 2008 data for three irrigation and three non-irrigation sector users in the BRSB. Results indicate that while the seniority rule favours senior license holding irrigation users and the People First policy favors municipal sector users, irrigation users are better off with the proportional allocation policy even though it affects all users across-the-board. Moreover, if the users can participate in a costless trade, then non-irrigation users tend to buy water as they place high value of water at the margin. Some irrigation users find selling water more profitable than utilizing their allocations for crop production.

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    Bibliographic Info

    Paper provided by Agricultural and Applied Economics Association in its series 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. with number 149734.

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    Date of creation: 2013
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    Handle: RePEc:ags:aaea13:149734

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    Related research

    Keywords: positive mathematical programming; allocative efficiency; seniority rule; proportional allocation; trading; Agricultural and Food Policy; Crop Production/Industries; Farm Management; C61; Q15; Q25;

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    1. Howitt, Richard E., 2005. "PMP Based Production Models-Development and Integration," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24484, European Association of Agricultural Economists.
    2. Steven Renzetti, 1992. "Estimating the Structure of Industrial Water Demands: The Case of Canadian Manufacturing," Land Economics, University of Wisconsin Press, vol. 68(4), pages 396-404.
    3. Renzetti, Steven, 1992. "Evaluating the welfare effects of reforming municipal water prices," Journal of Environmental Economics and Management, Elsevier, vol. 22(2), pages 147-163, March.
    4. Cortignani, Raffaele & Severini, Simone, 2009. "Modeling farm-level adoption of deficit irrigation using Positive Mathematical Programming," Agricultural Water Management, Elsevier, vol. 96(12), pages 1785-1791, December.
    5. He, Lixia & Horbulyk, Theodore M. & Ali, Md. Kamar & Le Roy, Danny G. & Klein, K.K., 2012. "Proportional water sharing vs. seniority-based allocation in the Bow River basin of Southern Alberta," Agricultural Water Management, Elsevier, vol. 104(C), pages 21-31.
    6. Chakravorty, Ujjayant & Umetsu, Chieko, 2003. "Basinwide water management: a spatial model," Journal of Environmental Economics and Management, Elsevier, vol. 45(1), pages 1-23, January.
    7. Booker J. F. & Young R. A., 1994. "Modeling Intrastate and Interstate Markets for Colorado River Water Resources," Journal of Environmental Economics and Management, Elsevier, vol. 26(1), pages 66-87, January.
    8. Ottmar R�hm & Stephan Dabbert, 2003. "Integrating Agri-Environmental Programs into Regional Production Models: An Extension of Positive Mathematical Programming," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 254-265.
    9. Steven Renzetti, 1993. "Examining the Differences in Self- and Publicly Supplied Firms' Water Demands," Land Economics, University of Wisconsin Press, vol. 69(2), pages 181-188.
    10. Richard E. Howitt, 1995. "A Calibration Method For Agricultural Economic Production Models," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(2), pages 147-159.
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