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Modelling water resource allocation: a case study on agriculture versus hydropower production

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  • Bielsa, Jorge
  • Duarte, Rosa

Abstract

In this paper we propose an economic model for the optimum allocation of water within a given area with the following features. First, the introduction of the institutional, geographical and time scheme under which the water rights are granted. Secondly, the establishment of a modelling framework for these characteristics which influence and are, in turn, influenced by two particular circumstances, namely the irregular conditions of the upstream flows and the possible new requirements of some of the users. Particular attention is paid to the influence of the time and space variables on both the water demand and supply conditions. The application of the model to a specific case confirms the potential of the analysis as a basis for achieving improvements in water allocation from the former administrative-based rules to new flexible and tradable water rights. In both case, gains are obtained from the exchange and we can note the implications of the time and space variables on the optimal allocations.

Suggested Citation

  • Bielsa, Jorge & Duarte, Rosa, 2003. "Modelling water resource allocation: a case study on agriculture versus hydropower production," MPRA Paper 36923, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:36923
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    References listed on IDEAS

    as
    1. Young, Robert A. & Haveman, Robert H., 1985. "Economics of water resources: a survey," Handbook of Natural Resource and Energy Economics, in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 2, chapter 11, pages 465-529, Elsevier.
    2. Dinar, Ariel & Wolf, Aaron, 1994. "International Markets for Water and the Potential for Regional Cooperation: Economic and Political Perspectives in the Western Middle East," Economic Development and Cultural Change, University of Chicago Press, vol. 43(1), pages 43-66, October.
    3. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    4. David A. Harpman, 1999. "Assessing the Short-Run Economic Cost of Environmental Constraints on Hydropower Operations at Glen Canyon Dam," Land Economics, University of Wisconsin Press, vol. 75(3), pages 390-401.
    5. Brian K. Edwards & Silvio J. Flaim & Richard E. Howitt, 1999. "Optimal Provision of Hydroelectric Power under Environmental and Regulatory Constraints," Land Economics, University of Wisconsin Press, vol. 75(2), pages 267-283.
    6. Chatterjee, Bishu & Howitt, Richard E. & Sexton, Richard J., 1998. "The Optimal Joint Provision of Water for Irrigation and Hydropower," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 295-313, November.
    7. Ronald C. Griffin & Shih-Hsun Hsu, 1993. "The Potential for Water Market Efficiency When Instream Flows Have Value," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(2), pages 292-303.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Water Rights; Agriculture; Hydropower; Allocation; Efficiency;
    All these keywords.

    JEL classification:

    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment

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