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Current issues in the economics of groundwater resource management

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  • Phoebe Koundouri

Abstract

The issue of groundwater management remains a practical concern in many regions throughout the world, while water managers continue to grapple with the question of how to manage this resource. In this article, we attempt to bring the most advanced and appropriate tools to bear on the issue of resource allocation involving groundwater. Our objective is to demonstrate the state of the art in the literature on ways to think about this complex resource and to deal with the important economic issues emanating from its complexity. We present the conceptual framework within which economists examine the elements interacting in the management of groundwater resources, indicate why the role of the market is limited with respect to the price of this very complex resource, and point to the mechanisms that can pull competitive groundwater price and quality-graded quantity of groundwater in line with their equilibrium levels. In particular, we critically review economic models of groundwater use, examine the potential for groundwater management, discuss the difficulties encountered in the estimation of the relevant control variables of such models, and identify the advantages and limitations of the instruments devised for the efficient use (allocation) of this resource. Finally, we argue that devised regulatory schemes usually ignore the information and knowledge needed for their implementation, and we suggest a core of conditions necessary for successful groundwater management reforms.

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Bibliographic Info

Paper provided by Athens University of Economics and Business in its series DEOS Working Papers with number 0402.

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Publication status: Published in JOURNAL OF ECONOMIC SURVEYS
Handle: RePEc:aue:wpaper:0402

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Keywords: Groundwater Management; Economic Instruments; Political Economy of Reform;

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References

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Citations

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Cited by:
  1. Jaghdani, Tinoush Jamali & Brummer, Bernhard, 2011. "Demand for Irrigation Water for Pistachio Production from Depleting Groundwater Resources: Spatial Econometric Approach," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114457, European Association of Agricultural Economists.
  2. Jia, Xiangping & Piotrowski, Stephan, 2006. "Land property, tenure security and credit access: a historical perspective of change processes in China," Research in Development Economics and Policy (Discussion Paper Series) 9083, Universitaet Hohenheim, Department of Agricultural Economics and Social Sciences in the Tropics and Subtropics.
  3. Cyril Bourgeois & Pierre-Alain Jayet, 2010. "Revisited water-oriented relationships between a set of farmers and an aquifer: accounting for lag effect," Working Papers 2010/06, INRA, Economie Publique.
  4. James Roumasset & Christopher Wada, 2012. "A Dynamic approach to PES pricing and finance for interlinked ecosystem services: Watershed conservation and groundwater management," Working Papers 2012-7, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
  5. Esteban, Encarna & Albiac, José, 2011. "Groundwater and ecosystems damages: Questioning the Gisser-Sánchez effect," Ecological Economics, Elsevier, vol. 70(11), pages 2062-2069, September.
  6. Blanco-Gutiérrez, Irene & Varela-Ortega, Consuelo & Flichman, Guillermo, 2011. "Cost-effectiveness of groundwater conservation measures: A multi-level analysis with policy implications," Agricultural Water Management, Elsevier, vol. 98(4), pages 639-652, February.
  7. Athanasios Kampas & Anna Vasilaki & Athanasios Petsakos & Angeliki Stefopoulou, 2013. "Irrigation Full Cost Assessment: The case of the Pinios Local Organization for Land Reclamation, Greece," Working Papers 2013-1, Agricultural University of Athens, Department Of Agricultural Economics.
  8. Carmen Marchiori & Susan Sayre & Leo Simon, 2012. "Bargaining and Devolution in the Upper Guadiana Basin," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 51(3), pages 453-470, March.
  9. Guilfoos, Todd & Pape, Andreas D. & Khanna, Neha & Salvage, Karen, 2013. "Groundwater management: The effect of water flows on welfare gains," Ecological Economics, Elsevier, vol. 95(C), pages 31-40.
  10. Alain Ayong Le Kama & Agnès Tomini, 2012. "Water Conservation versus Soil Salinity Control," EconomiX Working Papers 2012-8, University of Paris West - Nanterre la Défense, EconomiX.
  11. Saak, Alexander E. & Peterson, Jeffrey M., 2006. "Groundwater Use under Incomplete Information," 2006 Annual meeting, July 23-26, Long Beach, CA 21190, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  12. Koundouri, Phoebe & Christou, Christina, 2006. "Dynamic adaptation to resource scarcity and backstop availability: theory and application to groundwater," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(2), June.
  13. James Roumasset & Christopher Wada, 2012. "The Economics of Groundwater," Working Papers 2012-4, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
  14. Lenouvel, Vincent & Montginoul, Marielle, 2010. "Groundwater Management Instruments in a Conjunctive Use System: Assessing the Impact on Farmers’ Income Using Mixed Integer Linear Programming (MILP)," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 59(3).
  15. Karousakis, Katia & Koundouri, Phoebe, 2006. "A Typology of Economic Instruments and Methods for Efficient Water Resources Management in Arid and Semi-Arid Regions," MPRA Paper 41909, University Library of Munich, Germany.
  16. Du Bois, Rodrigo Salcedo & Macias, Miguel Angel Gutierrez, 2013. "Cooperation makes it happen? Groundwater management in Aguascalientes, Mexico: An experimental approach," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151139, Agricultural and Applied Economics Association.
  17. Katrin Erdlenbruch & Raphael Soubeyran & Mabel Tidball & Agnes Tomini, 2012. "(Anti-)Coordination Problems with Scarce Water Resources," Working Papers 12-28, LAMETA, Universtiy of Montpellier, revised Sep 2012.
  18. Zekri, Slim, 2008. "Using economic incentives and regulations to reduce seawater intrusion in the Batinah coastal area of Oman," Agricultural Water Management, Elsevier, vol. 95(3), pages 243-252, March.
  19. Phoebe Koundouri & Nikos Papandreou & Kyriaki Remoundou & Yiannis Kountouris, 2013. "A Bird s Eye View of the Greek Water Situation: The Potential for the Implementation of the EU WFD," DEOS Working Papers 1309, Athens University of Economics and Business.
  20. Cobourn, Kelly M., 2011. "Dynamic Feedback between Surface and Groundwater Systems: Implications for Conjunctive Management," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103893, Agricultural and Applied Economics Association.
  21. Phoebe Koundouri & Osiel Gonzalez Davila, . "The Use of Ecosystem Services Approach in Guiding Water Valuation and Management: Inland and Coastal Waters," DEOS Working Papers 1334, Athens University of Economics and Business.

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