IDEAS home Printed from https://ideas.repec.org/p/ags/aaea04/20342.html
   My bibliography  Save this paper

Panel Estimation Of Water Demand Based On An Episode Of Rate Reform

Author

Listed:
  • Moreno, Georgina
  • Sunding, David L.
  • Schoengold, Karina

Abstract

Agriculture is by far the dominant user of water in the western United States and in nearly all arid regions of the planet. Despite this fact and despite a growing push to rely on price mechanisms for rationalizing water allocation, there are few econometric studies of agricultural water demand that measure its responsiveness to price. Using a unique panel data set of water use at a disaggregated level, this paper estimates the parameters of an agricultural water demand function. The approach incorporates the notion of "jointness" in the farm production function, which postulates that producers choose inputs, outputs and technology simultaneously. Estimation results indicate that the own-price elasticity of water use is in the range [-0.415, -0.275], which includes the indirect effects of water price changes on output and technology choices. The estimation results also provide the first direct measurement of the conservation benefits of investment in precision irrigation technology. Water savings from technology adoption vary widely by crop but can be as high as 50 percent relative to gravity irrigation.

Suggested Citation

  • Moreno, Georgina & Sunding, David L. & Schoengold, Karina, 2004. "Panel Estimation Of Water Demand Based On An Episode Of Rate Reform," 2004 Annual meeting, August 1-4, Denver, CO 20342, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20342
    DOI: 10.22004/ag.econ.20342
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/20342/files/sp04sc02.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.20342?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
    ---><---

    References listed on IDEAS

    as
    1. Mundlak, Yair, 2003. "Economic Growth: Lessons From Two Centuries Of American Agriculture," Discussion Papers 14986, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    2. 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.
    3. David Zilberman & Doug Parker, 1996. "Explaining Irrigation Technology Choices: A Microparameter Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 1064-1072.
    4. T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 239-253.
    5. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    6. Margriet Caswell & David Zilberman, 1985. "The Choices of Irrigation Technologies in California," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(2), pages 224-234.
    7. Simon Gilchrist & John C. Williams, 2000. "Putty-Clay and Investment: A Business Cycle Analysis," Journal of Political Economy, University of Chicago Press, vol. 108(5), pages 928-960, October.
    8. Renwick, Mary E. & Green, Richard D., 2000. "Do Residential Water Demand Side Management Policies Measure Up? An Analysis of Eight California Water Agencies," Journal of Environmental Economics and Management, Elsevier, vol. 40(1), pages 37-55, July.
    9. Chao Wei, 2003. "Energy, the Stock Market, and the Putty-Clay Investment Model," American Economic Review, American Economic Association, vol. 93(1), pages 311-323, March.
    10. Bontemps, Christophe & Couture, Stéphane, 2002. "Irrigation water demand for the decision maker," Environment and Development Economics, Cambridge University Press, vol. 7(4), pages 643-657, October.
    11. Margriet F. Caswell & David Zilberman, 1986. "The Effects of Well Depth and Land Quality on the Choice of Irrigation Technology," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(4), pages 798-811.
    12. Brent Hueth & Ethan Ligon, 1999. "Agricultural Supply Response Under Contract," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 610-615.
    13. K. William Easter, 2000. "Asia's Irrigation Management in Transition: A Paradigm Shift Faces High Transaction Costs," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 22(2), pages 370-388.
    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. Easter, K. W., 2005. "Cost recovery and water pricing for irrigation and drainage projects," IWMI Working Papers H046176, International Water Management Institute.
    2. Juan Carlos Castro Ramírez & Flor Virginia Cruz Gutiérrez & José Dolores Magaña Zamora & Guillermo Martínez Atilano & Amelia Reyes Martínez & Rafael Octavio Sainz Zamora, 2017. "The water demand and its efficient allocation in agriculture: a case in Guanajuato, Mexico," Economia Coyuntural,Revista de temas de perspectivas y coyuntura, Instituto de Investigaciones Economicas y Sociales 'Jose Ortiz Mercado' (IIES-JOM), Facultad de Ciencias Economicas, Administrativas y Financieras, Universidad Autonoma Gabriel Rene Moreno, vol. 2(2), pages 145-180.

    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. 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. Lichtenberg, Erik, 2013. "Optimal Investment in Precision Irrigation Systems: A Dynamic Intraseasonal Approach," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149920, Agricultural and Applied Economics Association.
    3. George Frisvold & Charles Sanchez & Noel Gollehon & Sharon B. Megdal & Paul Brown, 2018. "Evaluating Gravity-Flow Irrigation with Lessons from Yuma, Arizona, USA," Sustainability, MDPI, vol. 10(5), pages 1-27, May.
    4. Moreno, Georgina & Sunding, David L., 2003. "Simultaneous Estimation Of Technology Adoption And Land Allocation," 2003 Annual meeting, July 27-30, Montreal, Canada 22134, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Zhang, Biao & Fu, Zetian & Wang, Jieqiong & Zhang, Lingxian, 2019. "Farmers’ adoption of water-saving irrigation technology alleviates water scarcity in metropolis suburbs: A case study of Beijing, China," Agricultural Water Management, Elsevier, vol. 212(C), pages 349-357.
    6. Moreno, Georgina & Sunding, David L., 2000. "Irrigation Technology Investment When The Price Of Water Is Stochastic," 2000 Annual meeting, July 30-August 2, Tampa, FL 21730, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. César Salazar & John Rand, 2016. "Production risk and adoption of irrigation technology: evidence from small-scale farmers in Chile," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 25(1), pages 1-37, December.
    8. Gautam, Tej K. & Bhatta, Dependra, 2017. "Determinants Of Irrigation Technology Adoptions And Production Efficiency In Nepal’S Agricultural Sector," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252856, Southern Agricultural Economics Association.
    9. 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.
    10. Meghamrita Chakraborty, 2023. "Linking Migration, Diversity and Regional Development in India," Journal of Development Policy and Practice, , vol. 8(1), pages 55-72, January.
    11. Hany Eldemerdash & Hugh Metcalf & Sara Maioli, 2014. "Twin deficits: new evidence from a developing (oil vs. non-oil) countries’ perspective," Empirical Economics, Springer, vol. 47(3), pages 825-851, November.
    12. Huy Quang Doan, 2019. "Trade, Institutional Quality and Income: Empirical Evidence for Sub-Saharan Africa," Economies, MDPI, vol. 7(2), pages 1-23, May.
    13. Skoufias, Emmanuel, 1998. "Determinants of child health during the economic transition in Romania," World Development, Elsevier, vol. 26(11), pages 2045-2056, November.
    14. Andrés Rodríguez-Pose & Yannis Psycharis & Vassilis Tselios, 2012. "Public investment and regional growth and convergence: Evidence from Greece," Papers in Regional Science, Wiley Blackwell, vol. 91(3), pages 543-568, August.
    15. González, Maximiliano & Guzmán, Alexander & Pombo, Carlos & Trujillo, María Andréa, 2012. "Family involvement and dividend policy in listed and non-listed firms," Galeras. Working Papers Series 034, Universidad de Los Andes. Facultad de Administración. School of Management.
    16. McGovern, Mark E. & Rokicki, Slawa & Reichman, Nancy E., 2022. "Maternal depression and economic well-being: A quasi-experimental approach," Social Science & Medicine, Elsevier, vol. 305(C).
    17. A. Mahabbati & A. Izady & M. Mousavi Baygi & K. Davary & S. M. Hasheminia, 2017. "Daily soil temperature modeling using ‘panel-data’ concept," Journal of Applied Statistics, Taylor & Francis Journals, vol. 44(8), pages 1385-1401, June.
    18. Gourio, Francois & Kashyap, Anil K, 2007. "Investment spikes: New facts and a general equilibrium exploration," Journal of Monetary Economics, Elsevier, vol. 54(Supplemen), pages 1-22, September.
    19. Vassilis Tselios, 2008. "Income and educational inequalities in the regions of the European Union: Geographical spillovers under welfare state restrictions," Papers in Regional Science, Wiley Blackwell, vol. 87(3), pages 403-430, August.
    20. Michele FRATIANNI & Chang HOON HO, 2007. "On the Relationship Between RTA Expansion and Openness," Working Papers 288, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.

    More about this item

    Keywords

    Resource /Energy Economics and Policy;

    Statistics

    Access and download statistics

    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:ags:aaea04:20342. 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    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.