Income distributional effects of using market-based instruments for managing common property resources
In this article, the authors show the trade-offs between efficiency and equity that arise from the application of market-based instruments to a heterogenous population of agents drawing from a natural resource pool. Using the example of groundwater, they find that there are overall losses in allocative efficiency when the centralized planner is constrained by equity considerations, and that the distribution of gains or losses to management becomes skewed asymmetrically across agents. These results demonstrate the importance of considering both efficiency gains and disparities in distributional inequity, when designing policy instruments that create winners and losers with potentially serious sociopolitical ramifications. Copyright 2007 International Association of Agricultural Economists.
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Volume (Year): 37 (2007)
Issue (Month): s1 (December)
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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2002 Annual meeting, July 28-31, Long Beach, CA
19812, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- James J. Murphy & Ariel Dinar & Richard E. Howitt & Erin Mastrangelo & Stephen J. Rassenti & Vernon L. Smith, 2006. "Mechanisms for Addressing Third-Party Impacts Resulting From Voluntary Water Transfers," Chapters, in: Using Experimental Methods in Environmental and Resource Economics, chapter 5 Edward Elgar.
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- McGartland, Albert M. & Oates, Wallace E., 1985. "Marketable permits for the prevention of environmental deterioration," Journal of Environmental Economics and Management, Elsevier, vol. 12(3), pages 207-228, September.
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