Irrigation Technology Adoption and Gains from Water Trading under Asymmetric Information
AbstractWe develop a water allocation and irrigation technology adoption model under the prior appropriation doctrine with asymmetric information among heterogeneous farmers and between farmers and water authorities; farmers’ heterogeneity is defined by a mix of land quality and knowledge. We find that adverse selection reduces the adoption of modern irrigation technology. We also show that even with asymmetric information, incentives for water trade exist and lead to additional technology adoption with gains to all parties. This suggests that under asymmetric information, a thin secondary market improves the allocation of water resources and induces additional adoption of modern irrigation technologies.
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Bibliographic InfoPaper provided by EconWPA in its series Others with number 0409005.
Length: 35 pages
Date of creation: 11 Sep 2004
Date of revision:
Note: Type of Document - pdf; pages: 35. Forthcoming in: American Journal of Agricultural Economics
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Asymmetric information; Irrigation technology; Technology adoption; Water trading.;
Other versions of this item:
- Chokri Dridi & Madhu Khanna, 2005. "Irrigation Technology Adoption and Gains from Water Trading under Asymmetric Information," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(2), pages 289-301.
- P - Economic Systems
- Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
- Z - Other Special Topics
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