IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Can Hydro-economic River Basis Models Simulate Water Shadow Prices Under Asymmetric Access?

  • Britz, Wolfgang
  • Kuhn, Arnim

Hydro-economic river basin models (HERBM) based on mathematical programming are conventionally formulated as explicit ‘aggregate optimization’ problems with a single, aggregate objective function. Often unintended, this format implicitly assumes that decisions on water allocation are made via central planning or functioning markets such as to maximize social welfare. In the absence of perfect water markets, however, individually optimal decisions by water users will differ from the social optimum. Classical aggregate HERBMs cannot simulate that situation and thus might be unable to describe existing institutions governing access to water and produce biased results for alternative ones. We propose a new solution format for HERBMs, based on Mixed Complementarity Programming (MCP), where modified shadow price relations express spatial externalities resulting from asymmetric access to water use. This new problem format, as opposed to commonly used linear (LP) or non-linear programming (NLP) approaches, enables the simultaneous simulation of numerous ‘independent optimization’ decisions by multiple water users while maintaining physical interdependences based on water use and flow in the river basin. We show that the alternative problem format allows formulating HERBMs that yield more realistic results when comparing different water management institutions.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://purl.umn.edu/114272
Download Restriction: no

Paper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 114272.

as
in new window

Length:
Date of creation: 2011
Date of revision:
Handle: RePEc:ags:eaae11:114272
Contact details of provider: Web page: http://www.eaae.org
Email:


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.:

as in new window
  1. Brandes, Wilhelm, 1989. "On the Limitations of Armchair Economics: Some Views of an Armchair Agricultural Economist," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 16(3), pages 319-43.
  2. Barreteau, O. & Bousquet, F. & Millier, C. & Weber, J., 2004. "Suitability of Multi-Agent Simulations to study irrigated system viability: application to case studies in the Senegal River Valley," Agricultural Systems, Elsevier, vol. 80(3), pages 255-275, June.
  3. Rosegrant, M.W. & Ringler, C. & McKinney, D.C. & Cai, X. & Keller, A. & Donoso, G., 2000. "Integrated economic-hydrologic water modeling at the basin scale: the Maipo river basin," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 24(1), December.
  4. Evans, Elizabeth M. & Lee, David R. & Boisvert, Richard N. & Arce, Blanca & Steenhuis, Tammo S. & Prano, Mauricio & Poats, Susan V., 2003. "Achieving efficiency and equity in irrigation management: an optimization model of the El Angel watershed, Carchi, Ecuador," Agricultural Systems, Elsevier, vol. 77(1), pages 1-22, July.
  5. Fernandez, Linda, 2006. "Natural resources, agriculture and property rights," Ecological Economics, Elsevier, vol. 57(3), pages 359-373, May.
  6. Doppler, Werner & Salman, Amer Z. & Al-Karablieh, Emad K. & Wolff, Heinz-Peter, 2002. "The impact of water price strategies on the allocation of irrigation water: the case of the Jordan Valley," Agricultural Water Management, Elsevier, vol. 55(3), pages 171-182, June.
  7. Ferris, Michael C. & Munson, Todd S., 2000. "Complementarity problems in GAMS and the PATH solver," Journal of Economic Dynamics and Control, Elsevier, vol. 24(2), pages 165-188, February.
  8. Burness, H. Stuart & Brill, Thomas C., 2001. "The role for policy in common pool groundwater use," Resource and Energy Economics, Elsevier, vol. 23(1), pages 19-40, January.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ags:eaae11:114272. 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 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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.