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Towards an Economics of Irrigation Networks

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  • Karl Jandoc

    ()
    (Department of Economics, University of Hawai`i at Manoa, Honolulu, Hawai`i, USA)

  • Ruben Juarez

    ()
    (Department of Economics, University of Hawai`i at Manoa, and University of Hawai`i Economic Research Organization, Honolulu, Hawai`i, USA)

  • James Roumasset

    ()
    (University of Hawai‘i at Manoa & University of Hawai’i Economic Research Organization)

Abstract

Both the economics and the engineering of irrigation design are typically based on the assumption of a single source. The more general economic problem is to determine which sources should be developed and how water should be allocated and delivered to various receptor-farmers. This is a problem in network economics. We begin our exploration with the problem of allocating irrigation water from existing sources when the conveyance structures are already in place. Transporting water from a particular source to a farmer entails a conveyance loss such that only a fraction of water sent from the source is received by the farmer. Optimal allocation requires that irrigation demands are matched with the least-cost source, including conveyance losses. Economic networks are then defined as optimally-matched subnetworks. Allocation within each economic network is then determined by equalizing the marginal products of water across farmers, reckoned at the source. Different cases are considered depending whether the sources have similar or different cost functions. We provide a modest beginning to the problem of endogenous sources by examining the problem of locating a single source within the network. We also provide a possible reconciliation of equity and efficiency objectives

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File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_14-16.pdf
File Function: First version, 2014
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Bibliographic Info

Paper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 201416.

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Length: 34 pages
Date of creation: May 2014
Date of revision:
Handle: RePEc:hai:wpaper:201416

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Keywords: Water networks; Spatial efficiency; Conveyance losses.;

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  1. Bergantinos, Gustavo & Vidal-Puga, Juan J., 2007. "A fair rule in minimum cost spanning tree problems," Journal of Economic Theory, Elsevier, vol. 137(1), pages 326-352, November.
  2. Roumasset, James, 1989. "Decentralization and local public goods: getting the incentives right," MPRA Paper 17111, University Library of Munich, Germany.
  3. James Roumasset & Christopher Wada, 2010. "Optimal and Sustainable Groundwater Extraction," Working Papers 2010-09, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
  4. Aadland, David & Kolpin, Van, 1998. "Shared irrigation costs: An empirical and axiomatic analysis," Mathematical Social Sciences, Elsevier, vol. 35(2), pages 203-218, March.
  5. Chakravorty Ujjayant & Hochman Eithan & Zilberman David, 1995. "A Spatial Model of Optimal Water Conveyance," Journal of Environmental Economics and Management, Elsevier, vol. 29(1), pages 25-41, July.
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