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The Economic Value of Groundwater in Obama

Author

Listed:
  • Kimberly Burnett

    (University of Hawaii Economic Research Organization, University of Hawaii at Manoa)

  • Christopher Wada

    (University of Hawaii Economic Research Organization, University of Hawaii at Manoa)

  • Aiko Endo

    (Research Department, Research Institute for Humanity and Nature)

  • Makoto Taniguchi

    (Research Department, Research Institute for Humanity and Nature)

Abstract

1. Study Region Obama City has a population of 33,000 and is located in the central Wakasa district, in southwest Fukui Prefecture, Japan. Obama’s groundwater resources are supported by the Kitagawa (38 km2) and Miniamigawa (17 km2) river basins. Groundwater is used aboveground year round for commercial and domestic purposes and during winter months to melt snow. Submarine groundwater discharge along the coast supports a nearshore fishery in the region. 2. Study Focus Results from a choice-based analysis suggest that residents are willing to pay on average JPY 565 per month to maintain the drinking water function and aquatic resource function of groundwater in the Fukui region. However, the static approach is not appropriate for estimating the net present value of the resource, i.e. the discounted net benefit aggregated over time. We therefore develop and propose a dynamic framework capable of assessing tradeoffs between the various water uses as scarcity increases or decreases in the future. 3. New Hydrological Insights for the Region Marginal willingness to pay for water in Obama is currently low because freshwater is abundant. We expect that future optimal water extraction patterns will depend most on trends in energy costs, climate change and demand growth.

Suggested Citation

  • Kimberly Burnett & Christopher Wada & Aiko Endo & Makoto Taniguchi, 2016. "The Economic Value of Groundwater in Obama," Working Papers 2016-8, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    • Handle: RePEc:hae:wpaper:2016-8
    as

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    References listed on IDEAS

    as
    1. Darrell Krulce & James A. Roumasset & Tom Wilson, 1997. "Optimal Management of a Renewable and Replaceable Resource: The Case of Coastal Groundwater," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1218-1228.
    2. Brozovic, Nicholas & Sunding, David L. & Zilberman, David, 2010. "On the spatial nature of the groundwater pumping externality," Resource and Energy Economics, Elsevier, vol. 32(2), pages 154-164, April.
    3. Pongkijvorasin, Sittidaj & Roumasset, James & Duarte, Thomas Kaeo & Burnett, Kimberly, 2010. "Renewable resource management with stock externalities: Coastal aquifers and submarine groundwater discharge," Resource and Energy Economics, Elsevier, vol. 32(3), pages 277-291, August.
    4. Basharat A. Pitafi & James A. Roumasset, 2009. "Pareto-Improving Water Management over Space and Time: The Honolulu Case," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(1), pages 138-153.
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    Keywords

    groundwater; economic value; optimization framework; Obama City; Japan;
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