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Determinants of willingness to pay for groundwater: insights from informal water markets in Rafsanjan, Iran

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  • Tinoush Jamali Jaghdani
  • Bernhard Brümmer

Abstract

This study highlights the methodological challenges in determining the value of water in informal water markets. As the decision to participate in water markets is unlikely to be random, self-selectivity is an important issue for an unbiased estimation of the participating farmers’ revealed willingness to pay. The relevance of these issues is illustrated for an informal irrigation water market in Iran. A two-stage random sampling was carried out in pistachio-growing farms which are irrigated by water from the Rafsanjan aquifer in Iran during 2008–2009. A Heckman sample selection model shows that the real willingness to pay can be less than the observed prices in an informal water market.

Suggested Citation

  • Tinoush Jamali Jaghdani & Bernhard Brümmer, 2016. "Determinants of willingness to pay for groundwater: insights from informal water markets in Rafsanjan, Iran," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 32(6), pages 944-960, November.
    • Handle: RePEc:taf:cijwxx:v:32:y:2016:i:6:p:944-960
    DOI: 10.1080/07900627.2015.1133405
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    References listed on IDEAS

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    1. Gary D. Libecap, 2010. "Water Rights and Markets in the U.S. Semi Arid West: Efficiency and Equity Issues," ICER Working Papers 30-2010, ICER - International Centre for Economic Research.
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    Cited by:

    1. Budiman Subhan Arif & Rondhi Mohammad & Khasan Ahmad Fatikhul & Peratama Bagus & Suwandari Anik & Ridjal Julian Adam & Rokhani & Soemarno & Prijono Sugeng & Soedarto, 2021. "Water Scarcity, Mountain Deforestation and the Economic Value of Water in a Small-Scale Irrigation System: A Case Study in East Java, Indonesia," Quaestiones Geographicae, Sciendo, vol. 40(2), pages 153-166, June.
    2. Bajaj, Akshi & Singh, S.P. & Nayak, Diptimayee, 2023. "Are farmers willing to pay for groundwater irrigation? Insights from informal groundwater markets in Western Uttar Pradesh, India," Agricultural Water Management, Elsevier, vol. 288(C).
    3. Nouri, Milad & Homaee, Mehdi & Pereira, Luis S. & Bybordi, Mohammad, 2023. "Water management dilemma in the agricultural sector of Iran: A review focusing on water governance," Agricultural Water Management, Elsevier, vol. 288(C).

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