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Information revelation through irrigation water pricing using volume reservations

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  • Mabel Tidball
  • Jean-Philippe Terreaux

Abstract

We study the properties of a pricing rule for irrigation water with two variables:the volume consumed by the farmer and the volume he/she reserves before the plantation. With a simple deterministic model, we show how this pricing rule allows the Water User Association manager to anticipate any possible usage conflict thanks to farmer information revelation, to guarantee his/her association budget equilibrium. We show too how farmers are incited to restrain their use of water. Moreover this pricing method is fair (all farmers are equally treated), flexible through the possible change of the value of the parameters, and moreover simple and easily understandable (when for example translated in a double entry table). Therefore, it compares favorably to other classical water pricing methods.

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File URL: http://www.lameta.univ-montp1.fr/Documents/DR2008-14.pdf
File Function: First version, 2008
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Bibliographic Info

Paper provided by LAMETA, Universtiy of Montpellier in its series Working Papers with number 08-14.

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Length: 17 pages
Date of creation: Sep 2008
Date of revision: Sep 2008
Handle: RePEc:lam:wpaper:08-14

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  1. Garcia, Serge & Reynaud, Arnaud, 2004. "Estimating the benefits of efficient water pricing in France," Resource and Energy Economics, Elsevier, vol. 26(1), pages 1-25, March.
  2. Johansson, Robert C., 2000. "Pricing irrigation water : a literature survey," Policy Research Working Paper Series 2449, The World Bank.
  3. Ragan A. Petrie & Laura O. Taylor, 2007. "Estimating the Value of Water Use Permits: A Hedonic Approach Applied to Farmland in the Southeastern United States," Land Economics, University of Wisconsin Press, vol. 83(3), pages 302-318.
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