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Water Markets and Water Quality

Author

Listed:
  • Kling, Catherine L.
  • Weinberg, Marca
  • Wilen, James

Abstract

In addition to improving the allocative efficiency of water use, water markets may reduce irrigation-related water quality problems. This potential benefit is examined with a nonlinear programming model developed to simulate agricultural decision-making in a drainage problem area in California's San Joaquin Valley. Results indicate that a 30% drainage goal is achievable through improvements in irrigation practices and changes in cropping patterns induced by a water market. Although water markets will not generally achieve a least-cost solution, they may be a practical alternative to economically efficient, but informationally intensive, environmental policies such as Pigouvian taxes.

Suggested Citation

  • Kling, Catherine L. & Weinberg, Marca & Wilen, James, 1993. "Water Markets and Water Quality," Staff General Research Papers Archive 1572, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:1572
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