IDEAS home Printed from https://ideas.repec.org/p/ags/uersib/356606.html
   My bibliography  Save this paper

The Agricultural and Economic Value of Water

Author

Listed:
  • Brown, Christina Estela
  • Tanner, Sophia J.
  • Hrozencik, R. Aaron
  • Gramig, Benjamin M.

Abstract

Water is an essential resource that sustains not only agriculture and human communities but also the natural environment. It provides a suite of ecosystem services, such as recreation and habitat for wildlife, that affect the well-being of the public. However, the use and allocation of water involve tradeoffs, especially in the context of competing demands and limited availability. This report presents a targeted review of the economics literature on the economic value of water for agriculture and environmental flows, leveraging both observed behavior and survey methods. It examines the economic implications of these tradeoffs, with a focus on environmental and resource economics, energy economics, and applied econometrics. The report also highlights the challenges and opportunities associated with measuring the economic value of water, including the complexity of the systems involved, the heterogeneity of preferences and behaviors, and the uncertainty of water availability.

Suggested Citation

  • Brown, Christina Estela & Tanner, Sophia J. & Hrozencik, R. Aaron & Gramig, Benjamin M., 2025. "The Agricultural and Economic Value of Water," Economic Information Bulletin 356606, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersib:356606
    DOI: 10.22004/ag.econ.356606
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/356606/files/EIB-288.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.356606?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. Federico García Suárez & Lilyan E Fulginiti & Richard K Perrin, 2019. "What Is the Use Value of Irrigation Water from the High Plains Aquifer?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(2), pages 455-466.
    3. Cameron, Trudy Ann & Shaw, W. Douglass & Ragland, Shannon E. & Callaway, J. Mac & Keefe, Sally, 1996. "Using Actual And Contingent Behavior Data With Differing Levels Of Time Aggregation To Model Recreation Demand," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 21(01), pages 1-20, July.
    4. Liu, Weiwei, 2020. "Valuation of Water Level: A Spatial Hedonic Analysis on Lakeshore Properties," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 45(01), January.
    5. Jedidiah Brewer & Robert Glennon & Alan Ker & Gary D. Libecap, 2007. "Water Markets in the West: Prices, Trading, and Contractual Forms," NBER Working Papers 13002, National Bureau of Economic Research, Inc.
    6. Ifft, Jennifer & Bigelow, Daniel P. & Savage, Jeffrey, 2018. "The Impact of Irrigation Restrictions on Cropland Values in Nebraska," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(2), May.
    7. Xinde Ji & Kelly M. Cobourn, 2018. "The Economic Benefits of Irrigation Districts under Prior Appropriation Doctrine: An Econometric Analysis of Agricultural Land‐Allocation Decisions," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(3), pages 441-467, September.
    8. Jakus, Paul M. & Dowell, Paula & Murray, Matthew N., 2000. "The Effect Of Fluctuating Water Levels On Reservoir Fishing," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-13, December.
    9. Lansford, Notie H., Jr. & Jones, Lonnie L., 1995. "Recreational And Aesthetic Value Of Water Using Hedonic Price Analysis," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(2), pages 1-15, December.
    10. Xiang Bi & Tatiana Borisova & Alan W. Hodges, 2019. "Economic Value of Visitation to Free-Flowing and Impounded Portions of the Ocklawaha River in Florida: Implications for Management of River Flow," The Review of Regional Studies, Southern Regional Science Association, vol. 49(2), pages 244-268.
    11. Steven Buck & Maximilian Auffhammer & David Sunding, 2014. "Land Markets and the Value of Water: Hedonic Analysis Using Repeat Sales of Farmland," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(4), pages 953-969.
    12. Nelson, Nanette M. & Loomis, John B. & Jakus, Paul M. & Kealy, Mary J. & von Stackelburg, Nicholas & Ostermiller, Jeff, 2015. "Linking ecological data and economics to estimate the total economic value of improving water quality by reducing nutrients," Ecological Economics, Elsevier, vol. 118(C), pages 1-9.
    13. Quilloy, Antonio Jesus A. & Yorobe, Jose M. & Ella, Victor B. & Lansigan, Felino P. & Cruz, Rex Victor O., 2018. "Valuing Groundwater in a Productive Aquifer Using the Production Function Approach: The Case of Rice Production in Lumban, Laguna, Philippines," Journal of Economics, Management & Agricultural Development, Journal of Economics, Management & Agricultural Development (JEMAD), vol. 4(2), December.
    14. Christopher Neher & Lucas Bair & John Duffield & David Patterson & Katherine Neher, 2019. "Convergent validity between willingness to pay elicitation methods: an application to Grand Canyon whitewater boaters," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 62(4), pages 611-625, March.
    15. Weber, Matthew A. & Meixner, Thomas & Stromberg, Juliet C., 2016. "Valuing instream-related services of wastewater," Ecosystem Services, Elsevier, vol. 21(PA), pages 59-71.
    16. Sampson, Gabriel S. & Hendricks, Nathan P. & Taylor, Mykel R., 2019. "Land market valuation of groundwater," Resource and Energy Economics, Elsevier, vol. 58(C).
    17. V. Kerry Smith, 1975. "Travel Cost Demand Models for Wilderness Recreation: A Problem of Non-Nested Hypotheses," Land Economics, University of Wisconsin Press, vol. 51(2), pages 103-111.
    18. Daniel McFadden, 1986. "The Choice Theory Approach to Market Research," Marketing Science, INFORMS, vol. 5(4), pages 275-297.
    19. Moore, Chris & Guignet, Dennis & Dockins, Chris & Maguire, Kelly B. & Simon, Nathalie B., 2018. "Valuing Ecological Improvements in the Chesapeake Bay and the Importance of Ancillary Benefits," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 9(1), pages 1-26, April.
    20. J. W. Milliman, 1959. "Land Values as Measures of Primary Irrigation Benefits," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 41(2), pages 234-243.
    21. L. Allen Torell & James D. Libbin & Michael D. Miller, 1990. "The Market Value of Water in the Ogallala Aquifer," Land Economics, University of Wisconsin Press, vol. 66(2), pages 163-175.
    22. Young, R.A., 1996. "Measuring Economic Benefits for Water Investments and Policies," Papers 338, World Bank - Technical Papers.
    23. Elizabeth Fadali & W. Douglass Shaw, 1998. "Can Recreation Values For A Lake Constitute A Market For Banked Agricultural Water?," Contemporary Economic Policy, Western Economic Association International, vol. 16(4), pages 433-441, October.
    24. Loureiro, Maria L. & Umberger, Wendy J., 2007. "A choice experiment model for beef: What US consumer responses tell us about relative preferences for food safety, country-of-origin labeling and traceability," Food Policy, Elsevier, vol. 32(4), pages 496-514, August.
    25. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    26. Yoo, James & Simonit, Silvio & Connors, John P. & Maliszewski, Paul J. & Kinzig, Ann P. & Perrings, Charles, 2013. "The value of agricultural water rights in agricultural properties in the path of development," Ecological Economics, Elsevier, vol. 91(C), pages 57-68.
    27. Dan Rigby & Francisco Alcon & Michael Burton, 2010. "Supply uncertainty and the economic value of irrigation water," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 37(1), pages 97-117, March.
    28. L. M. Hartman & R. L. Anderson, 1962. "Estimating the Value of Irrigation Water from Farm Sales Data in Northeastern Colorado," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 44(1), pages 207-213.
    29. Richardson, Leslie & Loomis, John, 2009. "The total economic value of threatened, endangered and rare species: An updated meta-analysis," Ecological Economics, Elsevier, vol. 68(5), pages 1535-1548, March.
    30. Jedidiah Brewer & Robert Glennon & Alan Ker & Gary Libecap, 2008. "2006 Presidential Address Water Markets In The West: Prices, Trading, And Contractual Forms," Economic Inquiry, Western Economic Association International, vol. 46(2), pages 91-112, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Swanepoel, G.D. & Hadrich, Joleen & Goemans, Christopher, 2015. "Estimating the Contribution of Groundwater Irrigation to Farmland Values in Phillips County, Colorado," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2015, pages 1-14.
    2. Zhanguo Zhu & Qinyuan Shen & Zhifeng Gao, 2022. "Consumer choices in agricultural markets with multitier collective labels and private brands," Agribusiness, John Wiley & Sons, Ltd., vol. 38(4), pages 905-922, October.
    3. Hrozencik, Aaron & Aillery, Marcel, 2021. "Trends in U.S. Irrigated Agriculture: Increasing Resilience Under Water Supply Scarcity," Economic Information Bulletin 327359, United States Department of Agriculture, Economic Research Service.
    4. Phoebe Koundouri, 2004. "Current Issues in the Economics of Groundwater Resource Management," Journal of Economic Surveys, Wiley Blackwell, vol. 18(5), pages 703-740, December.
    5. Sampson, Gabriel S. & Hendricks, Nathan P. & Taylor, Mykel R., 2019. "Land market valuation of groundwater," Resource and Energy Economics, Elsevier, vol. 58(C).
    6. Yoo, James & Simonit, Silvio & Connors, John P. & Maliszewski, Paul J. & Kinzig, Ann P. & Perrings, Charles, 2013. "The value of agricultural water rights in agricultural properties in the path of development," Ecological Economics, Elsevier, vol. 91(C), pages 57-68.
    7. Ifft, Jennifer & Bigelow, Daniel P. & Savage, Jeffrey, 2018. "The Impact of Irrigation Restrictions on Cropland Values in Nebraska," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(2), May.
    8. Gardner, Grant & Sampson, Gabriel S., 2022. "Land Value Impacts of Ethanol Market Expansion by Irrigation Status," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 47(3), September.
    9. Kent F. Kovacs & Shelby Rider, 2022. "Estimating the Demand for In Situ Groundwater for Climate Resilience: The Case of the Mississippi River Alluvial Aquifer in Arkansas," NBER Chapters, in: American Agriculture, Water Resources, and Climate Change, pages 367-381, National Bureau of Economic Research, Inc.
    10. Sampson, Gabriel & Gardner, Grant, 2021. "Land Value Impacts of Ethanol Market Expansion Differ by Irrigation Status," 2021 Annual Meeting, August 1-3, Austin, Texas 313854, Agricultural and Applied Economics Association.
    11. Browne, Oliver R. & Ji, Xinde James, 2023. "The Economic Value of Clarifying Property Rights: Evidence from Water in Idaho’s Snake River Basin," Journal of Environmental Economics and Management, Elsevier, vol. 119(C).
    12. Ortiz, Cristhian A. & Avila-Santamaría, Jorge J. & Martinez-Cruz, Adan L., 2023. "Dairy farmers’ willingness to adopt cleaner production practices for water conservation: A discrete choice experiment in Mejia, Ecuador," Agricultural Water Management, Elsevier, vol. 278(C).
    13. Doherty, Edel & Campbell, Danny, 2011. "Demand for improved food safety and quality: a cross-regional comparison," 85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK 108791, Agricultural Economics Society.
    14. Sigurdsson, Valdimar & Larsen, Nils Magne & Alemu, Mohammed Hussen & Gallogly, Joseph Karlton & Menon, R. G. Vishnu & Fagerstrøm, Asle, 2020. "Assisting sustainable food consumption: The effects of quality signals stemming from consumers and stores in online and physical grocery retailing," Journal of Business Research, Elsevier, vol. 112(C), pages 458-471.
    15. Jianhua Wang & Jiaye Ge & Yuting Ma, 2018. "Urban Chinese Consumers’ Willingness to Pay for Pork with Certified Labels: A Discrete Choice Experiment," Sustainability, MDPI, vol. 10(3), pages 1-14, February.
    16. Tapsuwan, Sorada & Polyakov, Maksym & Bark, Rosalind & Nolan, Martin, 2015. "Valuing the Barmah–Millewa Forest and in stream river flows: A spatial heteroskedasticity and autocorrelation consistent (SHAC) approach," Ecological Economics, Elsevier, vol. 110(C), pages 98-105.
    17. Ji, Xinde & Cobourn, Kelly M. & Weng, Weizhe, 2018. "The Effect of Climate Change on Irrigated Agriculture: Water-Temperature Interactions and Adaptation in the Western U.S," 2018 Annual Meeting, August 5-7, Washington, D.C. 274306, Agricultural and Applied Economics Association.
    18. Jakus, Paul M. & Dowell, Paula & Murray, Matthew N., 2000. "The Effect Of Fluctuating Water Levels On Reservoir Fishing," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-13, December.
    19. Mohammed H. Alemu & Søren Bøye Olsen & Suzanne E. Vedel & John Kinyuru & Kennedy O. Pambo, 2016. "Integrating sensory evaluations in incentivized discrete choice experiments to assess consumer demand for cricket flour buns in Kenya," IFRO Working Paper 2016/02, University of Copenhagen, Department of Food and Resource Economics.
    20. Wen Lin & David L Ortega & Vincenzina Caputo, 2023. "Experimental quantity, mental budgeting and food choice: a discrete choice experiment application," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 50(2), pages 457-496.

    More about this item

    Keywords

    Environmental Economics and Policy; Land Economics/Use; Resource/Energy Economics and Policy;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:uersib:356606. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/ersgvus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.