IDEAS home Printed from https://ideas.repec.org/a/wsi/wepxxx/v02y2016i02ns2382624x16500053.html
   My bibliography  Save this article

Water Markets and Storage — Substitutes or Complements for Drought Risk Mitigation?

Author

Listed:
  • Jonathan Yoder

    (#x2020;Washington State University, Pullman, WA, USA)

  • Micheal Brady

    (#x2020;Washington State University, Pullman, WA, USA)

  • Joseph Cook

    (University of Washington, USA)

Abstract

Are water storage and water markets complements or substitutes? This paper examines the conditions under which water storage for drought risk mitigation augments or attenuates water market gains from trade, and conversely, the conditions under which water markets augment or attenuate the value of additional water storage. The analysis is performed in the context of the Prior Appropriations doctrine in a fully appropriated basin. Two stylized examples based on water use at the intensive and extensive margin are provided, along with simulation results for proposed water storage projects and market development in the Yakima Basin in South-central Washington State.

Suggested Citation

  • Jonathan Yoder & Micheal Brady & Joseph Cook, 2016. "Water Markets and Storage — Substitutes or Complements for Drought Risk Mitigation?," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 1-21, June.
    • Handle: RePEc:wsi:wepxxx:v:02:y:2016:i:02:n:s2382624x16500053
    DOI: 10.1142/S2382624X16500053
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S2382624X16500053
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S2382624X16500053?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Xie, Yang & Zilberman, David, 2014. "The Economics of Water Project Capacities and Conservation Technologies," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169820, Agricultural and Applied Economics Association.
    2. Goodman, D. Jay, 2000. "More Reservoirs Or Transfers? A Computable General Equilibrium Analysis Of Projected Water Shortages In The Arkansas River Basin," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-16, December.
    3. Schoengold, Karina & Zilberman, David, 2007. "The Economics of Water, Irrigation, and Development," Handbook of Agricultural Economics, in: Robert Evenson & Prabhu Pingali (ed.), Handbook of Agricultural Economics, edition 1, volume 3, chapter 58, pages 2933-2977, Elsevier.
    4. Randall, Alan, 1981. "Property Entitlements And Pricing Policies For A Maturing Water Economy," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 25(3), pages 1-26, December.
    5. Gary D. Libecap, 2011. "Institutional Path Dependence in Climate Adaptation: Coman's "Some Unsettled Problems of Irrigation"," American Economic Review, American Economic Association, vol. 101(1), pages 64-80, February.
    6. Robert A. Young, 1986. "Why Are There So Few Transactions among Water Users?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(5), pages 1143-1151.
    7. Donna Brennan, 2008. "Missing markets for storage and the potential economic cost of expanding the spatial scope of water trade," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(4), pages 471-485, December.
    8. Ray Challen, 2000. "Institutions, Transaction Costs and Environmental Policy," Books, Edward Elgar Publishing, number 1961.
    9. R. Maria Saleth & Ariel Dinar, 2004. "The Institutional Economics of Water," Books, Edward Elgar Publishing, number 3443.
    10. Alan Randall, 1981. "Property Entitlements And Pricing Policies For A Maturing Water Economy," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 25(3), pages 195-220, December.
    11. Garrick, Dustin & Whitten, Stuart M. & Coggan, Anthea, 2013. "Understanding the evolution and performance of water markets and allocation policy: A transaction costs analysis framework," Ecological Economics, Elsevier, vol. 88(C), pages 195-205.
    12. Katharine Coman, 2011. "Some Unsettled Problems of Irrigation (1911)," American Economic Review, American Economic Association, vol. 101(1), pages 36-48, February.
    13. R. Maria Saleth & Ariel Dinar, 2004. "The Institutional Economics of Water : A Cross-Country Analysis of Institutions and Performance," World Bank Publications - Books, The World Bank Group, number 14884, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rowan Isaaks & Bonnie Colby, 2019. "Empirical Application of Rubinstein Bargaining Model in Western U.S. Water Transactions," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 6(01), pages 1-25, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pagan, Phil & Crase, Lin, 2008. "Institutional Constraints and Inter-jurisdictional Water Trade: The Case of the Australian Capital Territory and New South Wales," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6035, Australian Agricultural and Resource Economics Society.
    2. Dinar, Ariel, 2012. "Economy-wide implications of direct and indirect policy interventions in the water sector: lessons from recent work and future research needs," Policy Research Working Paper Series 6068, The World Bank.
    3. Adam Loch & Henning Bjornlund & Ronald McIver, 2011. "Achieving Targeted Environmental Flows: Alternative Allocation and Trading Models under Scarce Supply—Lessons from the Australian Reform Process," Environment and Planning C, , vol. 29(4), pages 745-760, August.
    4. Xie, Yang & Zilberman, David, 2015. "Water Storage Capacities versus Water Use Efficiency: Substitutes or Complements?," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205439, Agricultural and Applied Economics Association.
    5. Palomo-Hierro, Sara & Loch, Adam & Pérez-Blanco, C. Dionisio, 2022. "Improving water markets in Spain: Lesson-drawing from the Murray-Darling Basin in Australia," Agricultural Water Management, Elsevier, vol. 259(C).
    6. Pérez-Blanco, C.D. & Gutiérrez-Martín, C., 2017. "Buy me a river: Use of multi-attribute non-linear utility functions to address overcompensation in agricultural water buyback," Agricultural Water Management, Elsevier, vol. 190(C), pages 6-20.
    7. John Quiggin, 2006. "Repurchase of renewal rights: a policy option for the National Water Initiative ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(3), pages 425-435, September.
    8. Crase, Lin & Dollery, Brian, 2006. "Water rights: a comparison of the impacts of urban and irrigation reforms in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(3), pages 1-12, September.
    9. Carlos Mario Gómez Gómez & C. D. Pérez-Blanco & David Adamson & Adam Loch, 2018. "Managing Water Scarcity at a River Basin Scale with Economic Instruments," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 4(01), pages 1-31, January.
    10. James E. Nickum & K. William Easter, 1990. "Institutional arrangements for managing water conflicts in lake basins," Natural Resources Forum, Blackwell Publishing, vol. 14(3), pages 210-221, August.
    11. Bekchanov, Maksud & Bhaduri, Anik & Ringler, Claudia, 2015. "Potential gains from water rights trading in the Aral Sea Basin," Agricultural Water Management, Elsevier, vol. 152(C), pages 41-56.
    12. Zhang, Lei & Zhu, Xueqin & Heerink, Nico & Shi, Xiaoping, 2014. "Does output market development affect irrigation water institutions? Insights from a case study in northern China," Agricultural Water Management, Elsevier, vol. 131(C), pages 70-78.
    13. Piyanuch, Wuttisorn & MacAulay, T. Gordon & Batterham, Robert L., 2003. "Modelling Water Use in Thailand," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 58272, Australian Agricultural and Resource Economics Society.
    14. Garrick, Dustin & Whitten, Stuart M. & Coggan, Anthea, 2013. "Understanding the evolution and performance of water markets and allocation policy: A transaction costs analysis framework," Ecological Economics, Elsevier, vol. 88(C), pages 195-205.
    15. Bolinches, Antonio & Blanco-Gutiérrez, Irene & Zubelzu, Sergio & Esteve, Paloma & Gómez-Ramos, Almudena, 2022. "A method for the prioritization of water reuse projects in agriculture irrigation," Agricultural Water Management, Elsevier, vol. 263(C).
    16. Carlos Gómez & C. Pérez-Blanco, 2014. "Simple Myths and Basic Maths About Greening Irrigation," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 28(12), pages 4035-4044, September.
    17. Narain, V., 2009. "Water rights system as a demand management option: potentials, constraints and prospects," IWMI Books, Reports H042163, International Water Management Institute.
    18. Ansink, Erik & Weikard, Hans-Peter, 2009. "Contested water rights," European Journal of Political Economy, Elsevier, vol. 25(2), pages 247-260, June.
    19. Wilson, R. Trevor, 2007. "Perceptions, practices, principles and policies in provision of livestock water in Africa," Agricultural Water Management, Elsevier, vol. 90(1-2), pages 1-12, May.
    20. Ancev, Tiho, 2015. "The role of the commonwealth environmental water holder in annual water allocation markets," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(1), January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:wepxxx:v:02:y:2016:i:02:n:s2382624x16500053. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/wep/wep.shtml .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.