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Water Markets and Water Quality

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Author Info

  • Kling, Catherine L.
  • Weinberg, Marca
  • Wilen, James

Abstract

In addition to improving the allocative efficiency of water use, water markets may reduce irrigation-related water quality problems. This potential benefit is examined with a nonlinear programming model developed to simulate agricultural decision-making in a drainage problem area in California's San Joaquin Valley. Results indicate that a 30% drainage goal is achievable through improvements in irrigation practices and changes in cropping patterns induced by a water market. Although water markets will not generally achieve a least-cost solution, they may be a practical alternative to economically efficient, but informationally intensive, environmental policies such as Pigouvian taxes.

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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 1572.

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Date of creation: 01 Jan 1993
Date of revision:
Publication status: Published in American Journal of Agricultural Economics, January 1993, vol. 75 no. 2, pp. 278-91
Handle: RePEc:isu:genres:1572

Contact details of provider:
Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Email:
Web page: http://www.econ.iastate.edu
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Cited by:
  1. Alberto Garrido, 2007. "Water markets design and evidence from experimental economics," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 38(3), pages 311-330, November.
  2. Francesco Prota, 2002. "Water Resources And Water Policies," Working Papers 8_2002, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
  3. Schwabe, Kurt A., 2000. "Modeling state-level water quality management: the case of the Neuse River Basin," Resource and Energy Economics, Elsevier, vol. 22(1), pages 37-62, January.
  4. Grove, Bennie, 2006. "Stochastic efficiency optimisation of alternative agricultural water use strategies," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 45(4), December.
  5. José A. Gómez-Limón & Yolanda Martínez Martínez, 2004. "Multicriteria Modelling of Irrigation Water Market at Basin Level," Economic Working Papers at Centro de Estudios Andaluces E2004/26, Centro de Estudios Andaluces.
  6. Calatrava-Leyva, Javier & Colmenero, Alberto Garrido, 2001. "Analisis del efecto de los mercados de agua sobre el beneficio de las explotaciones, la contaminacion por nitratos y el empleo eventual agrario," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 1(02), December.
  7. Lichtenberg, Erik, 2000. "Agriculture And The Environment," Working Papers 28567, University of Maryland, Department of Agricultural and Resource Economics.
  8. Easter, K. William & Feder, Gershon, 1996. "Water Institutions And Economic Incentives To Ameliorate Market And Government Failures," Staff Papers 14217, University of Minnesota, Department of Applied Economics.
  9. Farhed Shah & David Zilberman & Erik Lichtenberg, 1995. "Optimal combination of pollution prevention and abatement policies: The case of agricultural drainage," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 5(1), pages 29-49, January.
  10. Dionisios Latinopoulos & Eftichios Sartzetakis, 2013. "Using tradable water permits in irrigated agriculture," Discussion Paper Series 2013_04, Department of Economics, University of Macedonia, revised Dec 2013.
  11. Ashar Aftab & Nick Hanley & Athanasios Kampas & David Ogelthorpe, . "The Impact of River Flow Restrictions on Instruments to Control noPoint Nitrate Pollution," Working Papers 2003_13, Business School - Economics, University of Glasgow.
  12. Easter, K William & Rosegrant, Mark W & Dinar, Ariel, 1999. "Formal and Informal Markets for Water: Institutions, Performance, and Constraints," World Bank Research Observer, World Bank Group, vol. 14(1), pages 99-116, February.
  13. Wichelns, Dennis, 1999. "An economic model of waterlogging and salinization in arid regions," Ecological Economics, Elsevier, vol. 30(3), pages 475-491, September.
  14. Hearne, Robert R. & William Easter, K., 1997. "The economic and financial gains from water markets in Chile," Agricultural Economics, Blackwell, vol. 15(3), pages 187-199, January.
  15. Sheila M. Olmstead, 2010. "The Economics of Managing Scarce Water Resources," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(2), pages 179-198, Summer.
  16. Ashar Aftab & Nick Hanley & Athanasios Kampas, 2007. "Co-ordinated environmental regulation: controlling non-point nitrate pollution while maintaining river flows," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 38(4), pages 573-593, December.
  17. Schwabe, Kurt A. & Knapp, Keith C. & Kan, Iddo, 2002. "Integrated Drainwater Management In Irrigated Agriculture," 2002 Annual meeting, July 28-31, Long Beach, CA 19609, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  18. Kan, Iddo & Schwabe, Kurt A. & Knapp, Keith C., 2002. "Microeconomics Of Irrigation With Saline Water," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(01), July.
  19. Rosegrant, Mark W. & Schleyer, Renato Gazmuri & Yadav, Satya N., 1995. "Water policy for efficient agricultural diversification: market-based approaches," Food Policy, Elsevier, vol. 20(3), pages 203-223, June.
  20. Calatrava-Requena, Javier & Garrido, Alberto, 2003. "The Effects Of Spot Water Markets On The Economic Risk Derived From Variable Water Supply," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25885, International Association of Agricultural Economists.
  21. Aftab, Ashar & Hanley, Nick & Baiocchi, Giovanni, 2010. "Integrated regulation of nonpoint pollution: Combining managerial controls and economic instruments under multiple environmental targets," Ecological Economics, Elsevier, vol. 70(1), pages 24-33, November.

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