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Implications of current and alternative water allocation policies in the Bow River Sub Basin of Southern Alberta


  • Ali, Md Kamar
  • Klein, K.K.


In this study, economic implications of allocating surface water with the existing policy (seniority rule) and three other alternative (People First, proportional reduction, and trading) policies are investigated to address potential water scarcities in the Bow River Sub Basin (BRSB) of Southern Alberta using a mathematical programming model. The model used an improved calibration technique and 2008 data for three irrigation and three non-irrigation sector users in the BRSB. Results indicate that while the seniority rule favors senior license holding irrigation users and the People First policy favors municipal sector users, irrigation users are better off with the proportional allocation policy even though it affects all users across-the-board. Moreover, if the users can participate in costless trades, then non-irrigation users tend to buy water as they place high value on water at the margin. Some irrigation users find selling water more profitable than utilizing their allocations for crop production.

Suggested Citation

  • Ali, Md Kamar & Klein, K.K., 2014. "Implications of current and alternative water allocation policies in the Bow River Sub Basin of Southern Alberta," Agricultural Water Management, Elsevier, vol. 133(C), pages 1-11.
  • Handle: RePEc:eee:agiwat:v:133:y:2014:i:c:p:1-11 DOI: 10.1016/j.agwat.2013.10.013

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    References listed on IDEAS

    1. Lixia He & Theodore M. Horbulyk, 2010. "Market-Based Policy Instruments, Irrigation Water Demand, and Crop Diversification in the Bow River Basin of Southern Alberta," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(2), pages 191-213, June.
    2. Blanco, Maria & Cortignani, Raffaele & Severini, Simone, 2008. "Evaluating Changes in Cropping Patterns due to the 2003 CAP Reform. An Ex-post Analysis of Different PMP Approaches Considering New Activities," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6674, European Association of Agricultural Economists.
    3. Ottmar Röhm & Stephan Dabbert, 2003. "Integrating Agri-Environmental Programs into Regional Production Models: An Extension of Positive Mathematical Programming," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 254-265.
    4. Mahan, Robert C. & Horbulyk, Theodore M. & Rowse, John G., 2002. "Market mechanisms and the efficient allocation of surface water resources in southern Alberta," Socio-Economic Planning Sciences, Elsevier, vol. 36(1), pages 25-49, March.
    5. Steven Renzetti, 1993. "Examining the Differences in Self- and Publicly Supplied Firms' Water Demands," Land Economics, University of Wisconsin Press, vol. 69(2), pages 181-188.
    6. Steven Renzetti, 1992. "Estimating the Structure of Industrial Water Demands: The Case of Canadian Manufacturing," Land Economics, University of Wisconsin Press, vol. 68(4), pages 396-404.
    7. He, Lixia & Horbulyk, Theodore M. & Ali, Md. Kamar & Le Roy, Danny G. & Klein, K.K., 2012. "Proportional water sharing vs. seniority-based allocation in the Bow River basin of Southern Alberta," Agricultural Water Management, Elsevier, vol. 104(C), pages 21-31.
    8. Cortignani, Raffaele & Severini, Simone, 2009. "Modeling farm-level adoption of deficit irrigation using Positive Mathematical Programming," Agricultural Water Management, Elsevier, vol. 96(12), pages 1785-1791, December.
    9. Richard E. Howitt, 1995. "A Calibration Method For Agricultural Economic Production Models," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(2), pages 147-159.
    10. Renzetti, Steven, 1992. "Evaluating the welfare effects of reforming municipal water prices," Journal of Environmental Economics and Management, Elsevier, vol. 22(2), pages 147-163, March.
    11. Howitt, Richard E., 2005. "PMP Based Production Models-Development and Integration," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24484, European Association of Agricultural Economists.
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    Cited by:

    1. Jinxia Wang & Henning Bjornlund & K. K. Klein & Lijuan Zhang & Wencui Zhang, 2016. "Factors that Influence the Rate and Intensity of Adoption of Improved Irrigation Technologies in Alberta, Canada," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(03), pages 1-32, September.
    2. Md Kamar Ali, 2016. "Improving Allocative Efficiency of Scarce Water in Southern Alberta," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 1-22, June.

    More about this item


    Positive mathematical programming; Allocative efficiency; Seniority rule; Proportional allocation; Trading;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water


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