IDEAS home Printed from https://ideas.repec.org/p/ioe/doctra/421.html

The Effect of Regulation Uncertainty on Water-Right Prices: The Case of the Loa Basin in the Antofagasta Region of Chile

Author

Listed:
  • Gonzalo Edwards
  • Oscar Cristi
  • Carlos Díaz

Abstract

This paper analyzes institutional arrangements that impose barriers to voluntary water transfers in the Loa basin, in northern Chile, and their impact on water prices in the market. We focus on restrictions imposed by the Chilean Water Authority (Dirección General de Aguas: DGA). These affect changes in water-diversion location and changes in the nature or type of water use. We hypothesize that these restrictions help explain why mining companies instead of acquiring additional water rights in the market prefer desalination, in spite of the high relative prices. With data for the Antofagasta Region, in Northern Chile, we provide evidence to support this hypothesis.

Suggested Citation

  • Gonzalo Edwards & Oscar Cristi & Carlos Díaz, 2012. "The Effect of Regulation Uncertainty on Water-Right Prices: The Case of the Loa Basin in the Antofagasta Region of Chile," Documentos de Trabajo 421, Instituto de Economia. Pontificia Universidad Católica de Chile..
    • Handle: RePEc:ioe:doctra:421
    as

    Download full text from publisher

    File URL: https://www.economia.uc.cl/docs/doctra/dt-421.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. Rosegrant, Mark W. & Binswanger, Hans P., 1994. "Markets in tradable water rights: Potential for efficiency gains in developing country water resource allocation," World Development, Elsevier, vol. 22(11), pages 1613-1625, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Edwards, Eric C. & Cristi, Oscar & Edwards, Gonzalo & Libecap, Gary D., 2018. "An illiquid market in the desert: estimating the cost of water trade restrictions in northern Chile," Environment and Development Economics, Cambridge University Press, vol. 23(6), pages 615-634, December.

    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. Quentin Grafton & Clay Landry & Gary Libecap & Sam McGlennon & Bob O'Brien, 2010. "An Integrated Assessment of Water Markets: Australia, Chile, China, South Africa and the USA," Centre for Water Economics, Environment and Policy Papers 1009, Centre for Water Economics, Environment and Policy, Crawford School of Public Policy, The Australian National University.
    2. Li, Man & Xu, Wenchao & Rosegrant, Mark W., 2016. "Irrigation, Risk Aversion, and Water Rights under Water Supply Uncertainty," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235753, Agricultural and Applied Economics Association.
    3. Françeska Tomori & Erik Ansink & Harold Houba & Nick Hagerty & Charles Bos, 2024. "Market power in California's water market," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(3), pages 1274-1299, May.
    4. R. Quentin Grafton & James Horne & Sarah Ann Wheeler, 2016. "On the Marketisation of Water: Evidence from the Murray-Darling Basin, Australia," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(3), pages 913-926, February.
    5. Xiaojun Shan & Jun Zhuang, 2013. "Cost of Equity in Homeland Security Resource Allocation in the Face of a Strategic Attacker," Risk Analysis, John Wiley & Sons, vol. 33(6), pages 1083-1099, June.
    6. Amirova, Iroda & Petrick, Martin & Djanibekov, Nodir, 2022. "Community, state and market: Understanding historical water governance evolution in Central Asia," IAMO Discussion Papers 327298, Institute of Agricultural Development in Transition Economies (IAMO).
    7. Richard Hornbeck & Pinar Keskin, 2015. "Does Agriculture Generate Local Economic Spillovers? Short-Run and Long-Run Evidence from the Ogallala Aquifer," American Economic Journal: Economic Policy, American Economic Association, vol. 7(2), pages 192-213, May.
    8. Reto Foellmi & Urs Meister, 2012. "Enhancing the Efficiency of Water Supply—Product Market Competition Versus Trade," Journal of Industry, Competition and Trade, Springer, vol. 12(3), pages 299-324, September.
    9. Bajaj, Akshi & Singh, S.P. & Nayak, Diptimayee, 2022. "Impact of water markets on equity and efficiency in irrigation water use: A systematic review and meta-analysis," Agricultural Water Management, Elsevier, vol. 259(C).
    10. Molden, David & Sakthivadivel, Ramasamy & Samad, Madar & Burton, Martin, 2005. "Phases of river basin development: the need for adaptive institutions," Book Chapters,, International Water Management Institute.
    11. Li, Yuanzhe & Xi, Tianyang & Zhou, Li-An, 2024. "Drinking water facilities and inclusive development: Evidence from Rural China," World Development, Elsevier, vol. 174(C).
    12. M Ejaz Qureshi & Tian Shi & Sumaira Qureshi & Wendy Proctor & Mac Kirby, 2009. "Removing Barriers to Facilitate Efficient Water Markets in the Murray Darling Basin – A Case Study from Australia," Socio-Economics and the Environment in Discussion (SEED) Working Paper Series 2009-02, CSIRO Sustainable Ecosystems.
    13. Gary D. Libecap, 2010. "Institutional Path Dependence in Climate Adaptation: Coman's "Some Unsettled Problems of Irrigation"," NBER Working Papers 16324, National Bureau of Economic Research, Inc.
    14. Hadjigeorgalis, Ereney, 2002. "Water Rights Heterogeneity And Price Determination: How Market And Product Attributes Affect Agricultural Water Market Prices," 2002 Annual meeting, July 28-31, Long Beach, CA 19790, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Rosegrant, Mark W., 1997. "Water resources in the twenty-first century: challenges and implications for action," 2020 vision discussion papers 20, International Food Policy Research Institute (IFPRI).
    16. Gary D. Libecap & R. Quentin Grafton & Clay Landry & J.R. O’Brien, 2009. "Markets - Water Markets: Australia’s Murray-Darling Basin and the US Southwest," ICER Working Papers 15-2009, ICER - International Centre for Economic Research.
    17. Meinzen-Dick, Ruth Suseela & Sullins, Martha, 1994. "Water markets in Pakistan: participation and productivity," EPTD discussion papers 4, International Food Policy Research Institute (IFPRI).
    18. Narain, V., 2009. "Water rights system as a demand management option: potentials, constraints and prospects," IWMI Books, Reports H042163, International Water Management Institute.
    19. Ansink, Erik & Weikard, Hans-Peter, 2009. "Contested water rights," European Journal of Political Economy, Elsevier, vol. 25(2), pages 247-260, June.
    20. Francesco Prota, 2002. "Water Resources And Water Policies," Working Papers 8_2002, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

    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:ioe:doctra:421. 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: Jaime Casassus (email available below). General contact details of provider: https://edirc.repec.org/data/iepuccl.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.