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Cost Analysis for Water Distribution in Agriculture

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  • Dono, Gabriele
  • Giraldo, Luca

Abstract

This paper uses a Translog form to estimate the water distribution cost for an irrigation consortium. The consortium operates under conditions of the under-utilization of facilities; thus, to achieve full cost recovery, water charges must be set at a higher level than efficiency. As a consequence, farmers may decide to reduce their use of the public irrigation service and instead exploit groundwater. The estimated Translog function explains the costs of water services throughout the irrigated area, and identifies items for which pricing does not accentuate the competition between the use of surface water and groundwater. Based on the estimated coefficients, a hypothesis is hence presented for pricing water provided by the consortium.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 114435.

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Date of creation: 2011
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Handle: RePEc:ags:eaae11:114435

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Related research

Keywords: irrigation; water pricing; Translog; cost analysis; Resource /Energy Economics and Policy;

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  1. Fumitoshi Mizutani & Takuya Urakami, 2001. "articles: Identifying network density and scale economies for Japanese water supply organizations," Papers in Regional Science, Springer, vol. 80(2), pages 211-230.
  2. Antonioli, B. & Filippini, M., 2001. "The use of a variable cost function in the regulation of the Italian water industry," Utilities Policy, Elsevier, vol. 10(3-4), pages 181-187.
  3. Weninger, Quinn, 2003. "Estimating Multiproduct Costs when Some Outputs Are Not Produced," Staff General Research Papers 10830, Iowa State University, Department of Economics.
  4. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
  5. Fuss, Melvyn & McFadden, Daniel & Mundlak, Yair, 1978. "A Survey of Functional Forms in the Economic Analysis of Production," Histoy of Economic Thought Chapters, in: Fuss, Melvyn & McFadden, Daniel (ed.), Production Economics: A Dual Approach to Theory and Applications, volume 1, chapter 4 McMaster University Archive for the History of Economic Thought.
  6. Christensen, Laurits R & Greene, William H, 1976. "Economies of Scale in U.S. Electric Power Generation," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 655-76, August.
  7. Kim, H Youn, 1987. "Economies of Scale in Multi-product Firms: An Empirical Analysis," Economica, London School of Economics and Political Science, vol. 54(214), pages 185-206, May.
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