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The optimal extraction of water along an arbitrarily configured river system

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  • Alex Coram
  • Lyle Noakes

Abstract

The fundamental problem for any scheme of water management that tries to maximise welfare across a river system is that of determining the optimal allocation at every point. The problem cannot, in general, be avoided by trading water rights because the price will not account for the effect of extraction at any one point on all other points. This article interprets the problem in terms of the indeterminacy that results from missing information on the value of water at internal junctions between rivers. It is then solved in an optimal control theory framework. Copyright 2009 The Authors. Journal compilation 2009 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Asia Pty Ltd.

Suggested Citation

  • Alex Coram & Lyle Noakes, 2009. "The optimal extraction of water along an arbitrarily configured river system," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(2), pages 251-264, April.
    • Handle: RePEc:bla:ajarec:v:53:y:2009:i:2:p:251-264
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    File URL: http://hdl.handle.net/10.1111/j.1467-8489.2007.00437.x
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    References listed on IDEAS

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    1. Coram, Alex, 2006. "The optimal allocation of water along a system of rivers: a continuous model with sequential bidding," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(3), pages 1-14, September.
    2. John Freebairn & John Quiggin, 2006. "Water rights for variable supplies ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(3), pages 295-312, September.
    3. Burness, H Stuart & Quirk, James P, 1979. "Appropriative Water Rights and the Efficient Allocation of Resources," American Economic Review, American Economic Association, vol. 69(1), pages 25-37, March.
    4. John Quiggin, 1988. "Murray River Salinity—An Illustrative Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(3), pages 635-645.
    5. Booker J. F. & Young R. A., 1994. "Modeling Intrastate and Interstate Markets for Colorado River Water Resources," Journal of Environmental Economics and Management, Elsevier, vol. 26(1), pages 66-87, January.
    6. Alex Coram, 2006. "The optimal allocation of water along a system of rivers: a continuous model with sequential bidding ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(3), pages 313-326, September.
    7. Weber, Marian L., 2001. "Markets for Water Rights under Environmental Constraints," Journal of Environmental Economics and Management, Elsevier, vol. 42(1), pages 53-64, July.
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