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Irrigation infrastructure charging: Non-rival access, cost sharing and exclusion

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  • Beare, Stephen
  • Heaney, Anna
  • Pechey, Lili

Abstract

Many irrigation areas are facing the problems of aging infrastructure and a declining revenue base from which to fund maintenance and repair activities. The push toward full cost recovery for storage and delivery services arising from water reform policies means that some supply utilities will need to consider the strategic rationalisation of infrastructure to remain viable in the long term. Consideration must also be given to the implementation of appropriate charging regimes for infrastructure access to ensure that irrigators are not sub-optimally excluded from the delivery system. Below the point of congestion, non-volumetric charges for access to irrigation infrastructure are analogous to a pricing regime for a non-rival but exclusive good. Two charging models for infrastructure access are analysed in this paper – socialised cost sharing and serial cost sharing – in the context of the efficient provision of a non-rival good. Findings indicate that over-rationalisation may occur under a socialised cost sharing model but that this potential is eliminated under a serial cost sharing model.

Suggested Citation

  • Beare, Stephen & Heaney, Anna & Pechey, Lili, 2006. "Irrigation infrastructure charging: Non-rival access, cost sharing and exclusion," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 137992, Australian Agricultural and Resource Economics Society.
  • Handle: RePEc:ags:aare06:137992
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    References listed on IDEAS

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    1. Hervé Moulin, 1994. "Serial Cost-Sharing of Excludable Public Goods," Review of Economic Studies, Oxford University Press, vol. 61(2), pages 305-325.
    2. S. C. Littlechild & G. Owen, 1973. "A Simple Expression for the Shapley Value in a Special Case," Management Science, INFORMS, vol. 20(3), pages 370-372, November.
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    Keywords

    Community/Rural/Urban Development;

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