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Willingness to pay for improved irrigation water supply reliability: An approach based on probability density functions

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  • Guerrero-Baena, Maria Dolores
  • Villanueva, Anastasio J.
  • Gómez-Limóna, José A.
  • Glenk, Klaus

Abstract

In irrigated agricultural systems, the main source of uncertainty to irrigators relates to water supply, as it significantly affects farm income. This paper investigates farmers’ utility changes associated with shifts in the probability density function of water supply leading to a higher water supply reliability (higher mean and lower variance in annual water allotments). A choice experiment relying on a mean-variance approach is applied to the case study of an irrigation district of the Guadalquivir River Basin (southern Spain). To our knowledge, this is the first study using parameters of these probability density functions of water supply as choice experiment attributes to value water supply reliability. Results show that there are different types of farmers according to their willingness to pay (WTP) for improvements in water supply reliability, with some willing to pay nothing (44.9%), others (28.6%) with relatively low WTP, and the remainder of farmers (26.5%) having high WTP. A range of factors influencing farmers’ preferences toward water supply reliability are revealed, with those related to risk exposure to water availability being of special importance. The results will help to design more efficient policy instruments to improve water supply reliability in semi-arid regions.

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  • Guerrero-Baena, Maria Dolores & Villanueva, Anastasio J. & Gómez-Limóna, José A. & Glenk, Klaus, 2018. "Willingness to pay for improved irrigation water supply reliability: An approach based on probability density functions," 166th Seminar, August 30-31, 2018, Galway, West of Ireland 276193, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa166:276193
    DOI: 10.22004/ag.econ.276193
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    Cited by:

    1. Shiang-Jen Wu & Jie-Sen Mai & Yi-Hong Lin & Keh-Chia Yeh, 2022. "Modeling Probabilistic-Based Reliability Analysis for Irrigation Water Supply Due to Uncertainties in Hydrological and Irrigation Factors," Sustainability, MDPI, vol. 14(19), pages 1-25, October.
    2. Gómez-Limón, José A. & Gutiérrez-Martín, Carlos & Montilla-López, Nazaret M., 2021. "Priority water rights. Are they useful for improving water-use efficiency at the irrigation district level?," Agricultural Water Management, Elsevier, vol. 257(C).
    3. Mamine, Fateh & Fares, M'hand & Minviel, Jean Joseph, 2020. "Contract Design for Adoption of Agrienvironmental Practices: A Meta-analysis of Discrete Choice Experiments," Ecological Economics, Elsevier, vol. 176(C).
    4. Gómez-Limón, José A. & Granado-Díaz, Rubén, 2023. "Assessing the demand for hydrological drought insurance in irrigated agriculture," Agricultural Water Management, Elsevier, vol. 276(C).
    5. Gómez-Limón, José A., 2020. "Hydrological drought insurance for irrigated agriculture in southern Spain," Agricultural Water Management, Elsevier, vol. 240(C).
    6. Mostafa Mardani Najafabadi & Abbas Mirzaei & Hassan Azarm & Siamak Nikmehr, 2022. "Managing Water Supply and Demand to Achieve Economic and Environmental Objectives: Application of Mathematical Programming and ANFIS Models," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 36(9), pages 3007-3027, July.
    7. Alcon, Francisco & de-Miguel, María Dolores & Martínez-Paz, José Miguel, 2021. "Assessment of real and perceived cost-effectiveness to inform agricultural diffuse pollution mitigation policies," Land Use Policy, Elsevier, vol. 107(C).
    8. Giannoccaro, Giacomo & Roselli, Luigi & Sardaro, Ruggiero & de Gennaro, Bernardo C., 2022. "Design of an incentive-based tool for effective water saving policy in agriculture," Agricultural Water Management, Elsevier, vol. 272(C).

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