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Supply uncertainty and the economic value of irrigation water

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  • Dan Rigby
  • Francisco Alcon
  • Michael Burton

Abstract

The economic value of irrigation water to horticultural producers in southern Spain is examined using a choice experiment. Marginal water values are found to be typically above those currently paid and to increase with holding size. Potential gains from trade are identified but this would entail the transfer of water and production from smaller to larger holdings. Uncertainty in future irrigation water allocations is also examined. We find producers to be strongly risk averse in their preferences towards water allocations, with significant heterogeneity in the valuation of reduced uncertainty regarding future water allocations. Oxford University Press and Foundation for the European Review of Agricultural Economics 2010; all rights reserved. For permissions, please email journals.permissions@oxfordjournals.org, Oxford University Press.

Suggested Citation

  • Dan Rigby & Francisco Alcon & Michael Burton, 2010. "Supply uncertainty and the economic value of irrigation water," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 37(1), pages 97-117, March.
  • Handle: RePEc:oup:erevae:v:37:y:2010:i:1:p:97-117
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    File URL: http://hdl.handle.net/10.1093/erae/jbq001
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    Cited by:

    1. Berbel, J., 2015. "Nota sobre valor, coste y renta del agua de riego," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 15(01).
    2. Tapsuwan, Sorada & Polyakov, Maksym & Bark, Rosalind & Nolan, Martin, 2015. "Valuing the Barmah–Millewa Forest and in stream river flows: A spatial heteroskedasticity and autocorrelation consistent (SHAC) approach," Ecological Economics, Elsevier, vol. 110(C), pages 98-105.
    3. Riccardo Scarpa & Cristiano Franceschinis & Mara Thiene, 2017. "A Monte Carlo Evaluation of the Logit-Mixed Logit under Asymmetry and Multimodality," Working Papers in Economics 17/23, University of Waikato.
    4. J. M. Gibson & D. Rigby & D. A. Polya & N. Russell, 2016. "Discrete Choice Experiments in Developing Countries: Willingness to Pay Versus Willingness to Work," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(4), pages 697-721, December.
    5. Klaus Glenk & Sergio Colombo, 2013. "Modelling outcome-related risk in choice experiments," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(4), pages 559-578, October.
    6. Alfonso Expósito, 2019. "Valuing Households’ Willingness to Pay for Water Transfers from the Irrigation Sector: A Case Study of the City of Seville (Southern Spain)," Sustainability, MDPI, Open Access Journal, vol. 11(24), pages 1-18, December.
    7. Dolores Rey & Alberto Garrido & Javier Calatrava, 2016. "Comparison of Different Water Supply Risk Management Tools for Irrigators: Option Contracts and Insurance," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(2), pages 415-439, October.
    8. Dadhi Adhikari & Jennifer A. Thacher & Janie M. Chermak & Robert P. Berrens, 2017. "Linking Forest to Faucets in a Distant Municipal Area: Public Support for Forest Restoration and Water Security in Albuquerque, New Mexico," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(01), pages 1-34, January.
    9. John Rolfe & Jill Windle, 2015. "Do Respondents Adjust Their Expected Utility in the Presence of an Outcome Certainty Attribute in a Choice Experiment?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 60(1), pages 125-142, January.
    10. Torres, Cati & Faccioli, Michela & Riera Font, Antoni, 2017. "Waiting or acting now? The effect on willingness-to-pay of delivering inherent uncertainty information in choice experiments," Ecological Economics, Elsevier, vol. 131(C), pages 231-240.
    11. Alcon, Francisco & Tapsuwan, Sorada & Brouwer, Roy & de Miguel, María Dolores, 2014. "A choice experiment of farmer’s acceptance and adoption of irrigation water supply management policies," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 183089, European Association of Agricultural Economists.
    12. repec:lrk:eeaart:36_3_14 is not listed on IDEAS
    13. Ziolkowska, Jadwiga R., 2015. "Shadow price of water for irrigation—A case of the High Plains," Agricultural Water Management, Elsevier, vol. 153(C), pages 20-31.
    14. Glenk, Klaus & Schaafsma, Marije & Moxey, Andrew & Martin-Ortega, Julia & Hanley, Nick, 2014. "A framework for valuing spatially targeted peatland restoration," Ecosystem Services, Elsevier, vol. 9(C), pages 20-33.
    15. Mesa-Jurado, Maria A. & Martin-Ortega, Julia & Ruto, Eric & Berbel, Julio, 2011. "The economic value of guaranteed water supply for irrigation under scarcity conditions," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114650, European Association of Agricultural Economists.
    16. M. Lefebvre & C. Biguzzi & E. Ginon & S. Gomez-y-Paloma & S. R. H. Langrell & S. Marette & G. Mateu & A. Sutan, 2017. "Mandatory integrated pest management in the EuropeanUnion: experimental insights on consumers’reactions," Review of Agricultural, Food and Environmental Studies, INRA Department of Economics, vol. 98(1-2), pages 25-54.
    17. Thomas Lundhede & Jette Bredahl Jacobsen & Nick Hanley & Niels Strange & Bo Jellesmark Thorsen, 2015. "Incorporating Outcome Uncertainty and Prior Outcome Beliefs in Stated Preferences," Land Economics, University of Wisconsin Press, vol. 91(2), pages 296-316.
    18. Williams, Galina & Rolfe, John, 2017. "Willingness to pay for emissions reduction: Application of choice modeling under uncertainty and different management options," Energy Economics, Elsevier, vol. 62(C), pages 302-311.
    19. Guerrero-Baena, M. Dolores & Villanueva, Anastasio J. & Gómez-Limón, José A. & Glenk, Klaus, 2019. "Willingness to pay for improved irrigation water supply reliability: An approach based on probability density functions," Agricultural Water Management, Elsevier, vol. 217(C), pages 11-22.
    20. Martin-Ortega, Julia & Allott, Timothy E.H. & Glenk, Klaus & Schaafsma, Marije, 2014. "Valuing water quality improvements from peatland restoration: Evidence and challenges," Ecosystem Services, Elsevier, vol. 9(C), pages 34-43.
    21. Alcon, Francisco & Tapsuwan, Sorada & Martínez-Paz, José M. & Brouwer, Roy & de Miguel, María D., 2014. "Forecasting deficit irrigation adoption using a mixed stakeholder assessment methodology," Technological Forecasting and Social Change, Elsevier, vol. 83(C), pages 183-193.
    22. Antonio A. R. Ioris, 2012. "The Positioned Construction of Water Values: Pluralism, Positionality and Praxis," Environmental Values, White Horse Press, vol. 21(2), pages 143-162, May.

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