Sequential decision-making: Theory and evidence for irrigator water allocation trade participation and volumetric choices
AbstractGreater understanding of irrigator water trade decision-making processes provides insight into the efficient reallocation of water resources between competing uses. Water trade decisions are often modelled as single processes, although results in this paper suggest that sequential decision modelling is more appropriate. We devised a theoretical model of experienced and naïve irrigators based on the search literature, and observed sequential decision-making in water allocation trade decisions using sample-selection techniques. There is evidence of positive selection effects, which motivate different drivers for the decision to participate in water trade and the subsequent decision about how much water to buy or sell.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Australian Agricultural and Resource Economics Society in its series 2013 Conference (57th), February 5-8, 2013, Sydney, Australia with number 152199.
Date of creation: Feb 2013
Date of revision:
Contact details of provider:
Postal: AARES Central Office Manager, Crawford School of Public Policy, ANU, Canberra ACT 0200
Phone: 0409 032 338
Web page: http://www.aares.info/
More information through EDIRC
sequential decision-making; sample-selection; water allocation trade; Murray- Darling Basin; Research and Development/Tech Change/Emerging Technologies; Research Methods/ Statistical Methods;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-15 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dustin Garrick & Chelsea Lane‐Miller & Amy L. McCoy, 2011. "Institutional Innovations to Govern Environmental Water in the Western United States: Lessons for Australia’s Murray–Darling Basin," Economic Papers, The Economic Society of Australia, vol. 30(2), pages 167-184, 06.
- Kumar, V. & Subramanian, Velavan, 1997. "A contingency framework for the mode of entry decision," Journal of World Business, Elsevier, vol. 32(1), pages 53-72, April.
- Wheeler, Sarah & Bjornlund, Henning & Zuo, Alec & Shanahan, Martin, 2010. "The changing profile of water traders in the Goulburn-Murray Irrigation District, Australia," Agricultural Water Management, Elsevier, vol. 97(9), pages 1333-1343, September.
- S. Wheeler & A. Zuo & H. Bjornlund & C. Lane Miller, 2012. "Selling the Farm Silver? Understanding Water Sales to the Australian Government," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 52(1), pages 133-154, May.
- Marnie Griffith & Gary Codner & Erwin Weinmann & Sergei Schreider, 2009. "Modelling hydroclimatic uncertainty and short-run irrigator decision making: the Goulburn system ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(4), pages 565-584, October.
- Brooks, Robert & Harris, Edwyna, 2008. "Efficiency gains from water markets: Empirical analysis of Watermove in Australia," Agricultural Water Management, Elsevier, vol. 95(4), pages 391-399, April.
- J. Scott Long & Jeremy Freese, 2006. "Regression Models for Categorical Dependent Variables using Stata, 2nd Edition," Stata Press books, StataCorp LP, edition 2, number long2, October.
- Griffith, Marnie & Codner, Gary & Weinmann, Erwin & Schreider, Sergei, 2009. "Modelling hydroclimatic uncertainty and short-run irrigator decision making: the Goulburn system," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(4), December.
- Puhani, Patrick A, 2000. " The Heckman Correction for Sample Selection and Its Critique," Journal of Economic Surveys, Wiley Blackwell, vol. 14(1), pages 53-68, February.
- Moscarini, Giuseppe & Wright, Randall, 2010. "Introduction to Search Theory and Applications," Journal of Economic Theory, Elsevier, vol. 145(4), pages 1319-1324, July.
- Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132.
- Adam Loch & Henning Bjornlund & Sarah Wheeler & Jeff Connor, 2012. "Allocation trade in Australia: a qualitative understanding of irrigator motives and behaviour," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(1), pages 42-60, 01.
- R. Quentin Grafton & Gary Libecap & Samuel McGlennon & Clay Landry & Bob O'Brien, 2011. "An Integrated Assessment of Water Markets: A Cross-Country Comparison," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(2), pages 219-239, Summer.
- Wheeler, Sarah Ann & Bjornlund, Henning & Shanahan, Martin & Zuo, Alec, 2008. "Price elasticity of water allocations demand in the Goulburn–Murray Irrigation District," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(1), March.
- Colwell, Peter F & Munneke, Henry J, 1999. "Land Prices and Land Assembly in the CBD," The Journal of Real Estate Finance and Economics, Springer, vol. 18(2), pages 163-80, March.
- Bell, Rosalyn & Gali, Jyothi & Gretton, Paul & Redmond, Ineke, 2007. "The responsiveness of Australian farm performance to changes in irrigation water use and trade," 2007 Conference (51st), February 13-16, 2007, Queenstown, New Zealand 9454, Australian Agricultural and Resource Economics Society.
- Ariely, Dan, 2000. " Controlling the Information Flow: Effects on Consumers' Decision Making and Preferences," Journal of Consumer Research, University of Chicago Press, vol. 27(2), pages 233-48, September.
- Francis Vella, 1998. "Estimating Models with Sample Selection Bias: A Survey," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 127-169.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.