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Multicriteria Modelling of Irrigation Water Market at Basin Level

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    Abstract

    This paper develops a multi-criteria methodology to simulate irrigation water markets at basin level. For this purpose it is assumed that irrigators try to optimise personal multi-attribute utility functions via their productive decision making process (crop mix), subject to a set of constraints based upon the structural features of their farms. In this sense, farmers with homogeneous behaviour regarding water use have been grouped, such groups being established as .types. to be considered in the whole water market simulation model. This model calculates the equilibrium through a solution that maximises aggregate welfare, which is quantified as the sum of the multi-attribute utilities reached by each of the participating agents. This methodology has been empirically applied for the Duero Basin (Northern Spain), finding that the implementation of this institution would increase economic efficiency and agricultural labour demand, particularly during droughts.

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    File URL: http://public.centrodeestudiosandaluces.es/pdfs/E200426.pdf
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    Bibliographic Info

    Paper provided by Centro de Estudios Andaluces in its series Economic Working Papers at Centro de Estudios Andaluces with number E2004/26.

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    Length: 27 pages
    Date of creation: 2004
    Date of revision:
    Handle: RePEc:cea:doctra:e2004_26

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    Keywords: Water markets; Multi-Attribute Utility Theory; Irrigation water; Duero Valley (Spain).;

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    1. José A. Gómez-Limón & Manuel Arriaza & Julio Berbel, 2002. "Conflicting Implementation of Agricultural and Water Policies in Irrigated Areas in the EU," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(2), pages 259-281.
    2. Solano, C. & Leon, H. & Perez, E. & Herrero, M., 2001. "Characterising objective profiles of Costa Rican dairy farmers," Agricultural Systems, Elsevier, vol. 67(3), pages 153-179, March.
    3. Sumpsi, JoseMaria & Amador, Francisco & Romero, Carlos, 1997. "On farmers' objectives: A multi-criteria approach," European Journal of Operational Research, Elsevier, vol. 96(1), pages 64-71, January.
    4. Arriaza Balmon, Manuel & Gomez-Limon, Jose A. & Upton, Martin, 2002. "Local water markets for irrigation in southern Spain: A multicriteria approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(1), March.
    5. Kling, Catherine L. & Weinberg, Marca & Wilen, James, 1993. "Water Markets and Water Quality," Staff General Research Papers 1572, Iowa State University, Department of Economics.
    6. Miranda, Dionisio Ortiz & Delgado, Felisa Cena, 2001. "Los derechos de propiedad en la agricultura de regadio: su situacion frente al cambio institucional," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 1(02), December.
    7. Smith, Donnie & Capstick, Daniel F., 1976. "Establishing Priorities Among Multiple Management Goals," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 8(02), December.
    8. Chakravorty, Ujjayant & Zilberman, David, 2000. "Introduction to the special issue on: Management of water resources for agriculture," Agricultural Economics, Blackwell, vol. 24(1), pages 3-7, December.
    9. José A. Gómez-Limón & Laura Riesgo & Manuel Arriaza, 2003. "Multi-Criteria Analysis of Factors Use Level: The Case of Water for Irrigation," Economic Working Papers at Centro de Estudios Andaluces E2003/18, Centro de Estudios Andaluces.
    10. Joyce Willock & Ian J. Deary & Gareth Edwards-Jones & Gavin J. Gibson & Murray J. McGregor & Alistair Sutherland & J. Barry Dent & Oliver Morgan & Robert Grieve, 1999. "The Role of Attitudes and Objectives in Farmer Decision Making: Business and Environmentally-Oriented Behaviour in Scotland," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(2), pages 286-303.
    11. Thobani, Mateen, 1997. "Formal Water Markets: Why, When, and How to Introduce Tradable Water Rights," World Bank Research Observer, World Bank Group, vol. 12(2), pages 161-79, August.
    12. Cary, John W. & Holmes, Bill, 1982. "Relationships Among Farmers' Goals And Farm Adjustment Strategies: Some Empirics Of A Multidimensional Approach," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 26(02), August.
    13. Costa, F. P. & Rehman, T., 1999. "Exploring the link between farmers' objectives and the phenomenon of pasture degradation in the beef production systems of Central Brazil," Agricultural Systems, Elsevier, vol. 61(2), pages 135-146, August.
    14. Randall, Alan, 1981. "Property Entitlements And Pricing Policies For A Maturing Water Economy," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 25(03), December.
    15. Amador, Francisco & Sumpsi, Jose Maria & Romero, Carlos, 1998. "A Non-interactive Methodology to Assess Farmers' Utility Functions: An Application to Large Farms in Andalusia, Spain," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 25(1), pages 92-109.
    16. Berbel, J. & Rodriguez-Ocana, A., 1998. "An MCDM approach to production analysis: An application to irrigated farms in Southern Spain," European Journal of Operational Research, Elsevier, vol. 107(1), pages 108-118, May.
    17. Dinar, Ariel & Rosegrant, Mark W. & Meinzen-Dick, Ruth, 1997. "Water allocation mechanisms : principles and examples," Policy Research Working Paper Series 1779, The World Bank.
    18. Rosegrant, Mark W. & Binswanger, Hans P., 1994. "Markets in tradable water rights: Potential for efficiency gains in developing country water resource allocation," World Development, Elsevier, vol. 22(11), pages 1613-1625, November.
    19. Dinar, Ariel & Letey, J., 1991. "Agricultural water marketing, allocative efficiency, and drainage reduction," Journal of Environmental Economics and Management, Elsevier, vol. 20(3), pages 210-223, May.
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