Valuing Access To Multiple Water Supply Sources In Irrigated Agriculture With A Hedonic Pricing Model
Increasing aridity, more frequent and intense drought, and greater degrees of water scarcity create unique challenges for agriculture. In response to these challenges, which often manifest themselves in the form of lower and more variable surface water supplies as well as depleted and degraded ground water supplies, growers are apt to seek out opportunities to adapt. One option confronting growers to reduce their exposure to water scarcity and heightened uncertainty is to diversify. Indeed, having access to a portfolio of supplies is one way in which water and irrigation districts as well as individual growers are responding to the changing landscape of water resource availability. The objective of this paper is to evaluate the benefits to irrigated agriculture from having access to multiple water supply sources, i.e., a water portfolio. With farm-level information on approximately 2000 agricultural parcels across California, we use the hedonic property value method to investigate the extent growers’ benefit from having access to multiple sources of water (i.e., a water portfolio). Our results suggest that while lower quality waters, less reliable water, and less water all negatively impact agricultural land values, holding a water portfolio has a positive impact on land values through its role in mitigating the negative aspects of these factors and reducing the sensitivity of agriculture to climate-related factors. From a policy perspective, such results identify a valuable adaptation tool that water and irrigation districts may consider to help offset the negative impacts of climate change, drought, and population increases on water supply availability and reliability.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Raymond B. Palmquist, 1989. "Land as a Differentiated Factor of Production: A Hedonic Model and Its Implications for Welfare Measurement," Land Economics, University of Wisconsin Press, vol. 65(1), pages 23-28.
- Richard Hornbeck & Pinar Keskin, 2011. "The Evolving Impact of the Ogallala Aquifer: Agricultural Adaptation to Groundwater and Climate," NBER Working Papers 17625, National Bureau of Economic Research, Inc.
- Kurt A. Schwabe & Iddo Kan & Keith C. Knapp, 2006. "Drainwater Management for Salinity Mitigation in Irrigated Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 133-149.
- Ragan A. Petrie & Laura O. Taylor, 2007. "Estimating the Value of Water Use Permits: A Hedonic Approach Applied to Farmland in the Southeastern United States," Land Economics, University of Wisconsin Press, vol. 83(3), pages 302-318.
- John Faux & Gregory M. Perry, 1999. "Estimating Irrigation Water Value Using Hedonic Price Analysis: A Case Study in Malheur County, Oregon," Land Economics, University of Wisconsin Press, vol. 75(3), pages 440-452.
- Wolfram Schlenker & W. Michael Hanemann & Anthony C. Fisher, 2005. "Will U.S. Agriculture Really Benefit from Global Warming? Accounting for Irrigation in the Hedonic Approach," American Economic Review, American Economic Association, vol. 95(1), pages 395-406, March.
- Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
- Mendelsohn, Robert & Nordhaus, William D & Shaw, Daigee, 1994. "The Impact of Global Warming on Agriculture: A Ricardian Analysis," American Economic Review, American Economic Association, vol. 84(4), pages 753-71, September.
- Jeff Connor & Kurt Schwabe & Darran King & David Kaczan & Mac Kirby, 2009.
"Impacts of climate change on lower Murray irrigation ,"
Australian Journal of Agricultural and Resource Economics,
Australian Agricultural and Resource Economics Society, vol. 53(3), pages 437-456, 07.
- Connor, Jeff & Schwabe, Kurt & King, Darran & Kaczan, David & Kirby, Mac, 2009. "Impacts of climate change on lower Murray irrigation," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(3), September.
- Myrick Freeman, A. III, 1974. "On estimating air pollution control benefits from land value studies," Journal of Environmental Economics and Management, Elsevier, vol. 1(1), pages 74-83, May.
- Jesper Stage & Rick Williams, 2003. "Implicit water pricing in Namibian farmland markets," Development Southern Africa, Taylor & Francis Journals, vol. 20(5), pages 633-645.
- Connor, Jeffery D. & Schwabe, Kurt & King, Darran & Knapp, Keith, 2012. "Irrigated agriculture and climate change: The influence of water supply variability and salinity on adaptation," Ecological Economics, Elsevier, vol. 77(C), pages 149-157.
- Javier Calatrava & Alberto Garrido, 2005. "Spot water markets and risk in water supply," Agricultural Economics, International Association of Agricultural Economists, vol. 33(2), pages 131-143, 09.
When requesting a correction, please mention this item's handle: RePEc:ags:aaea12:124604. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.