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Rural-To-Urban Water Transfers: Measuring Direct Foregone Benefits Of Irrigation Water Under Uncertain Water Supplies

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  • Taylor, R. Garth
  • Young, Robert A.

Abstract

Irrigation water from a southeastern Colorado county has been sold to distant municipalities. The county's junior water right delivered limited and uncertain water supplies which were used on relatively poor soils. The ability of water markets to allocate water to the highest-valued use was addressed by assessing the direct foregone benefits of the transfer using deterministic and discrete stochastic sequential (DSSP) programming models. Crop mix predicted by the DSSP followed observed regional patterns. The DSSP was thus used to derive regional water demand from which foregone value was estimated. Direct regional foregone agricultural benefits were relatively low-due to uncertain water supplies and unproductive soils-indicating the market selected a low-valued supply for transfer.

Suggested Citation

  • Taylor, R. Garth & Young, Robert A., 1995. "Rural-To-Urban Water Transfers: Measuring Direct Foregone Benefits Of Irrigation Water Under Uncertain Water Supplies," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(2), pages 1-16, December.
  • Handle: RePEc:ags:jlaare:30769
    DOI: 10.22004/ag.econ.30769
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    File URL: https://ageconsearch.umn.edu/record/30769/files/20020247.pdf
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    References listed on IDEAS

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    1. Kahil, Mohamed Taher & Connor, Jeffery D. & Albiac, Jose, 2015. "Efficient water management policies for irrigation adaptation to climate change in Southern Europe," Ecological Economics, Elsevier, vol. 120(C), pages 226-233.
    2. Carlos E. Carpio, & Octavio A. Ramirez, & Tullaya Boonsaeng, 2011. "Potential for Tradable Water Allocation and Rights in Jordan," Land Economics, University of Wisconsin Press, vol. 87(4), pages 595-609.
    3. Paul J. Block & Kenneth Strzepek & Mark W. Rosegrant & Xinshen Diao, 2008. "Impacts of considering climate variability on investment decisions in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 39(2), pages 171-181, September.
    4. Leiva, Akssell J. & Skees, Jerry R., 2008. "Using Irrigation Insurance to Improve Water Usage of the Rio Mayo Irrigation System in Northwestern Mexico," World Development, Elsevier, vol. 36(12), pages 2663-2678, December.
    5. Wenyong Wu & Suchuang Di & Qianheng Chen & Shengli Yang & Xingyao Pan & Honglu Liu, 2013. "The Compensation Mechanism and Water Quality Impacts of Agriculture-Urban Water Transfers: A Case Study in China’s Chaobai Watershed," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(1), pages 187-197, January.
    6. Griffith, Marnie & Codner, Gary & Weinmann, Erwin & Schreider, Sergei, 2009. "Modelling hydroclimatic uncertainty and short-run irrigator decision making: the Goulburn system," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(4), pages 1-20.
    7. Houk, Eric E. & Taylor, Garth & Frasier, W. Marshall, 2000. "Valuing The Characteristics Of Irrigation Water In The Platte River Basin," 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia 36454, Western Agricultural Economics Association.
    8. Leiva, Akssell J. & Skees, Jerry R., 2005. "Managing Irrigation Risk with Inflow-Based Derivatives: The Case of Rio Mayo Irrigation District in Sonora, Mexico," 2005 Annual meeting, July 24-27, Providence, RI 19448, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Leiva, Akssell J. & Skees, Jerry R., 2006. "An Empirical Evaluation of Irrigation Insurance for Agricultural Systems in the Mexican Northwest," Annual Meeting, 2006, May 25-28, Montreal, Quebec 34177, Canadian Agricultural Economics Society.
    10. Levan Elbakidze & Brett Schiller & R. Garth Taylor, 2017. "Estimation of Short and Long Run Derived Irrigation Water Demands and Elasticities," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(01), pages 1-22, January.
    11. Jakhalu, Atoho & Werthmann, Christine, 2011. "Governance of Inter-Sectoral Water Re-allocation within the Context of Urbanization in Hyderabad. Using the Institutions of Sustainability (IoS) framework," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114458, European Association of Agricultural Economists.
    12. Berbel, J. & Rodriguez-Ocana, A., 1998. "An MCDM approach to production analysis: An application to irrigated farms in Southern Spain," European Journal of Operational Research, Elsevier, vol. 107(1), pages 108-118, May.
    13. GP Green & JP O'Connor, 2001. "Water Banking And Restoration Of Endangered Species Habitat: An Application To The Snake River," Contemporary Economic Policy, Western Economic Association International, vol. 19(2), pages 225-237, April.
    14. Hoag, Dana L. & Conradie, Beatrice, 2003. "The Cost Of Meeting Equity: Opportunity Cost Of Irrigation In The Fish-Sundays Scheme Of South Africa," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25832, International Association of Agricultural Economists.
    15. Chiueh, Y. & Chen, M. C., 2003. "An economic analysis of Taiwan water market and water bank establishment," IWMI Books, Reports H033354, International Water Management Institute.
    16. Olen, Beau & Wu, JunJie & Langpap, Christian, 2012. "Crop-specific Irrigation Choices for Major Crops on the West Coast: Water Scarcity and Climatic Determinants," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124843, Agricultural and Applied Economics Association.
    17. Zhou, Yuan & Zhang, Yili & Abbaspour, Karim C. & Mosler, Hans-Joachim & Yang, Hong, 2009. "Economic impacts on farm households due to water reallocation in China's Chaobai watershed," Agricultural Water Management, Elsevier, vol. 96(5), pages 883-891, May.
    18. Scheierling, Susanne M., 2011. "Assessing the direct economic effects of reallocating irrigation water to alternative uses : concepts and an application," Policy Research Working Paper Series 5797, The World Bank.

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