Experimentally Testing Institutions And Policy Instruments To Coordinate Groundwater Recharge in the Coleambally Irrigation Area
A rising saline aquifer in the Coleambally Irrigation Area constitutes a common pool resource, characterised by costly exclusion and rival utilisation for regional irrigators. The approach outlined in general terms in this paper is the application of formal, empirical techniques to guide the design and a priori testing of a proposed tradeable recharge entitlements scheme to resolve the common pool dilemma. The focus of the research is the design and quantitative evaluation of potential market impediment solutions and alternative coordinating mechanisms applying the findings of experimental economics techniques. The initial policy design process involved identifying potential impediments to the functioning of a credit trade policy which could prevent cost-effective and environmentally effective outcomes. The SWAGMAN recharge model was employed as a recharge accounting tool to determine farm specific recharge rates as a function of irrigation application, crop mix and the spatial location of the farm in the Coleambally landscape. The experimental setting relies on a context rich catchment analogue, which represents the economic decision-making and trading environment facing farmers, populated with the salient biophysical, economic and hydrological characteristics estimated for proposed land use changes. Observed behavioural responses to policy initiatives were compared according to three metrics: aggregate groundwater recharge, farm income (expressed as player payments) net of non-compliance penalties and market outcomes. The rationale and experimental design of three treatments to test the efficacy of institutional arrangements to overcome identified impediments is outlined; the provision of recharge information, the introduction of a recharge cap and market exchange of tradeable recharge credits and the face to face communication. The conclusions focus on the application of the experimental results in the specification of a potential groundwater recharge management contract and the challenges for a successful implementation with local constituency.
|Date of creation:||2006|
|Contact details of provider:|| Postal: AARES Central Office Manager, Crawford School of Public Policy, ANU, Canberra ACT 0200|
Phone: 0409 032 338
Web page: http://www.aares.info/
More information through EDIRC
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.:
- Loomes, Graham, 1999. "Some Lessons from Past Experiments and Some Challenges for the Future," Economic Journal, Royal Economic Society, vol. 109(453), pages 35-45, February.
- Tietenberg, Tom, 1998. "Ethical influences on the evolution of the US tradable permit approach to air pollution control," Ecological Economics, Elsevier, vol. 24(2-3), pages 241-257, February.
- Jacinto Braga & Chris Starmer, 2005. "Preference Anomalies, Preference Elicitation and the Discovered Preference Hypothesis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(1), pages 55-89, 09.
- J. Ledyard, 1997.
"Public Goods: A Survey of Experimental Research,"
Levine's Working Paper Archive
509, David K. Levine.
- Ledyard, John O., "undated". "Public Goods: A Survey of Experimental Research," Working Papers 861, California Institute of Technology, Division of the Humanities and Social Sciences.
- John O. Ledyard, 1994. "Public Goods: A Survey of Experimental Research," Public Economics 9405003, EconWPA, revised 22 May 1994.
- Kahneman, Daniel & Tversky, Amos, 1979.
"Prospect Theory: An Analysis of Decision under Risk,"
Econometric Society, vol. 47(2), pages 263-291, March.
- Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
- Gregory L. Poe & William D. Schulze & Kathleen Segerson & Jordan F. Suter & Christian A. Vossler, 2004. "Exploring the Performance of Ambient-Based Policy Instruments When Nonpoint Source Polluters Can Cooperate," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(5), pages 1203-1210.
- Smith, Vernon L, 1982. "Markets as Economizers of Information: Experimental Examination of the "Hayek Hypothesis"," Economic Inquiry, Western Economic Association International, vol. 20(2), pages 165-179, April.
- Vernon Smith, 2002. "Method in Experiment: Rhetoric and Reality," Experimental Economics, Springer;Economic Science Association, vol. 5(2), pages 91-110, October.
- Common,Michael, 1995. "Sustainability and Policy," Cambridge Books, Cambridge University Press, number 9780521436052, December.
- Gintis, Herbert, 2000. "Beyond Homo economicus: evidence from experimental economics," Ecological Economics, Elsevier, vol. 35(3), pages 311-322, December.
- Juan-Camilo Cardenas, 2000.
"How Do Groups Solve Local Commons Dilemmas? Lessons from Experimental Economics in the Field,"
Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development,
Springer, vol. 2(3), pages 305-322, September.
- Juan-Camilo Cardenas, 2001. "How do groups solve local commons dilemmas? Lessons from experimental economics in the field," Artefactual Field Experiments 00018, The Field Experiments Website.
- Friedman,Daniel & Sunder,Shyam, 1994. "Experimental Methods," Cambridge Books, Cambridge University Press, number 9780521456821, December.
- Plott, Charles R. & Porter, David P., 1996. "Market architectures and institutional testbedding: An experiment with space station pricing policies," Journal of Economic Behavior & Organization, Elsevier, vol. 31(2), pages 237-272, November.
- Krause, Kate & Chermak, Janie M & Brookshire, David S, 2003. "The Demand for Water: Consumer Response to Scarcity," Journal of Regulatory Economics, Springer, vol. 23(2), pages 167-191, March.
When requesting a correction, please mention this item's handle: RePEc:ags:aare06:139923. 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.