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Towards an Economics of Irrigation Networks

Author

Listed:
  • Karl Jandoc

    (Department of Economics, University of Hawai`i at Manoa, Honolulu, Hawai`i, USA)

  • Ruben Juarez

    (Department of Economics, University of Hawai`i at Manoa, and University of Hawai`i Economic Research Organization, Honolulu, Hawai`i, USA)

  • James Roumasset

    (University of Hawai‘i at Manoa & University of Hawai’i Economic Research Organization)

Abstract

Both the economics and the engineering of irrigation design are typically based on the assumption of a single source. The more general economic problem is to determine which sources should be developed and how water should be allocated and delivered to various receptor-farmers. This is a problem in network economics. We begin our exploration with the problem of allocating irrigation water from existing sources when the conveyance structures are already in place. Transporting water from a particular source to a farmer entails a conveyance loss such that only a fraction of water sent from the source is received by the farmer. Optimal allocation requires that irrigation demands are matched with the least-cost source, including conveyance losses. Economic networks are then defined as optimally-matched subnetworks. Allocation within each economic network is then determined by equalizing the marginal products of water across farmers, reckoned at the source. Different cases are considered depending whether the sources have similar or different cost functions. We provide a modest beginning to the problem of endogenous sources by examining the problem of locating a single source within the network. We also provide a possible reconciliation of equity and efficiency objectives

Suggested Citation

  • Karl Jandoc & Ruben Juarez & James Roumasset, 2014. "Towards an Economics of Irrigation Networks," Working Papers 201416, University of Hawaii at Manoa, Department of Economics.
  • Handle: RePEc:hai:wpaper:201416
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    File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_14-16.pdf
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    References listed on IDEAS

    as
    1. James A. Roumasset & Christopher A. Wada, 2010. "Optimal and Sustainable Groundwater Extraction," Sustainability, MDPI, vol. 2(8), pages 1-10, August.
    2. Roumasset James & Wada Christopher A, 2011. "Ordering Renewable Resources: Groundwater, Recycling, and Desalination," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-29, May.
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    4. Chakravorty Ujjayant & Hochman Eithan & Zilberman David, 1995. "A Spatial Model of Optimal Water Conveyance," Journal of Environmental Economics and Management, Elsevier, vol. 29(1), pages 25-41, July.
    5. James Roumasset, 1989. "Decentralization and Local Public Goods: Getting the Incentives Right," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 26(1), pages 1-13, June.
    6. Ujjayant Chakravorty & James Roumasset, 1991. "Efficient Spatial Allocation of Irrigation Water," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(1), pages 165-173.
    7. Roumasset James & Wada Christopher A, 2011. "Ordering Renewable Resources: Groundwater, Recycling, and Desalination," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-29, May.
    8. Bergantinos, Gustavo & Vidal-Puga, Juan J., 2007. "A fair rule in minimum cost spanning tree problems," Journal of Economic Theory, Elsevier, vol. 137(1), pages 326-352, November.
    9. Aadland, David & Kolpin, Van, 1998. "Shared irrigation costs: An empirical and axiomatic analysis," Mathematical Social Sciences, Elsevier, vol. 35(2), pages 203-218, March.
    10. Ruben Juarez, 2008. "The worst absolute surplus loss in the problem of commons: random priority versus average cost," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 34(1), pages 69-84, January.
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    2. Majah-Leah Ravago & James Roumasset, 2016. "The Public Economics of Electricity Policy with Philippine Applications," Working Papers 201613, University of Hawaii at Manoa, Department of Economics.

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    More about this item

    Keywords

    Water networks; Spatial efficiency; Conveyance losses.;
    All these keywords.

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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