IDEAS home Printed from https://ideas.repec.org/p/ris/albaec/2009_008.html
   My bibliography  Save this paper

Water Allocation Under Distribution Losses: Comparing Alternative Institutions

Author

Listed:
  • Chakravorty, Ujjayant

    () (University of Alberta, Department of Economics)

  • Hochman, Eithan

    () (Hebrew University of Jerusalem)

  • Umetsu, Chieko

    () (Research Institute for Humanity and Nature)

  • Zilberman, David

    () (University of California at Berkeley)

Abstract

The distribution of water resources is characterized by increasing returns to scale. Distribution systems link water generation to its end-use. Standard economic analysis overlooks the interaction among these micro-markets - generation, distribution and end-use. We compare water allocation when there is market power in each micro-market. These outcomes are compared with benchmark cases - social planning and a competitive business-as-usual regime. Simulations suggest that institutions with market power in generation and end-use generate significantly higher welfare than the distribution monopoly and the competitive regime. However, if the policy goal is to maximize the size of the grid, a distribution monopoly is preferred.

Suggested Citation

  • Chakravorty, Ujjayant & Hochman, Eithan & Umetsu, Chieko & Zilberman, David, 2009. "Water Allocation Under Distribution Losses: Comparing Alternative Institutions," Working Papers 2009-8, University of Alberta, Department of Economics.
  • Handle: RePEc:ris:albaec:2009_008
    as

    Download full text from publisher

    File URL: https://sites.ualberta.ca/~econwps/2009/wp2009-08.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robert Wilson, 2002. "Architecture of Power Markets," Econometrica, Econometric Society, vol. 70(4), pages 1299-1340, July.
    2. 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.
    3. Chakravorty, Ujjayant & Umetsu, Chieko, 2003. "Basinwide water management: a spatial model," Journal of Environmental Economics and Management, Elsevier, vol. 45(1), pages 1-23, January.
    4. Ray, Isha & Williams, Jeffrey, 2002. "Locational asymmetry and the potential for cooperation on a canal," Journal of Development Economics, Elsevier, vol. 67(1), pages 129-155, February.
    5. Pranab Bardhan & Dilip Mookherjee, 2006. "Decentralisation and Accountability in Infrastructure Delivery in Developing Countries," Economic Journal, Royal Economic Society, vol. 116(508), pages 101-127, January.
    6. Crampes, C. & Moreaux, M., 2001. "Water resource and power generation," International Journal of Industrial Organization, Elsevier, vol. 19(6), pages 975-997, May.
    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. Krebs, Vanessa & Schmidt, Martin, 2018. "Uniqueness of market equilibria on networks with transport costs," Operations Research Perspectives, Elsevier, vol. 5(C), pages 169-173.
    2. Xie, Yang & Zilberman, David, 2014. "The Economics of Water Project Capacities under Optimal Water Inventory Management," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt6c24636b, Department of Agricultural & Resource Economics, UC Berkeley.
    3. Ansink, Erik & Houba, Harold, 2012. "Market power in water markets," Journal of Environmental Economics and Management, Elsevier, vol. 64(2), pages 237-252.
    4. Xie, Yang & Zilberman, David, 2015. "Water-Storage Capacities versus Water-Use Efficiency: Substitutes or Complements?," 2015 Conference, August 9-14, 2015, Milan, Italy 211894, International Association of Agricultural Economists.
    5. Ellen M. Bruno & Richard J. Sexton, 2020. "The Gains from Agricultural Groundwater Trade and the Potential for Market Power: Theory and Application," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(3), pages 884-910, May.
    6. Françeska Tomori & Erik Ansink & Harold Houba & Nick Hagerty & Charles Bos, 2021. "Market power in California's water market," Tinbergen Institute Discussion Papers 21-011/VIII, Tinbergen Institute.
    7. Xie, Yang & Zilberman, David, 2014. "The Economics of Water Project Capacities and Conservation Technologies," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169820, Agricultural and Applied Economics Association.
    8. Zhanqi Wang & Jun Yang & Xiangzheng Deng & Xi Lan, 2015. "Optimal Water Resources Allocation under the Constraint of Land Use in the Heihe River Basin of China," Sustainability, MDPI, Open Access Journal, vol. 7(2), pages 1-18, February.

    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. Ansink, Erik & Weikard, Hans-Peter, 2009. "Contested water rights," European Journal of Political Economy, Elsevier, vol. 25(2), pages 247-260, June.
    2. Pamela Giselle Katic, 2010. "Spatial dynamics and optimal resource extraction," Centre for Water Economics, Environment and Policy Papers 1002, Centre for Water Economics, Environment and Policy, Crawford School of Public Policy, The Australian National University.
    3. Moita, Rodrigo Menon Simões & Monte, Daniel, 2017. "Competition in cascades," Textos para discussão 456, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    4. Najafi Alamdarlo, Hamed & Pourmozafar, Hosein & Vakilpoor, Mohamad Hasan, 2019. "Improving demand technology and internalizing external effects in groundwater market framework, case study: Qazvin plain in Iran," Agricultural Water Management, Elsevier, vol. 213(C), pages 164-173.
    5. Moore, J. & Woo, C.K. & Horii, B. & Price, S. & Olson, A., 2010. "Estimating the option value of a non-firm electricity tariff," Energy, Elsevier, vol. 35(4), pages 1609-1614.
    6. Chau, Nancy H. & Qin, Yu & Zhang, Weiwen, 2015. "Networked Leaders in the Shadow of the Market – A Chinese Experiment in Allocating Land Conversion Rights," Working Papers 250022, Cornell University, Department of Applied Economics and Management.
    7. Carsten Helm & Mathias Mier, 2020. "Steering the Energy Transition in a World of Intermittent Electricity Supply: Optimal Subsidies and Taxes for Renewables Storage," ifo Working Paper Series 330, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    8. Alain Ayong Le Kama & Agnès Tomini, 2012. "Water Conservation versus Soil Salinity Control," EconomiX Working Papers 2012-8, University of Paris Nanterre, EconomiX.
    9. Glachant, Jean-Michel & Pignon, Virginie, 2005. "Nordic congestion's arrangement as a model for Europe? Physical constraints vs. economic incentives," Utilities Policy, Elsevier, vol. 13(2), pages 153-162, June.
    10. Pamela Katic, 2015. "Groundwater Spatial Dynamics and Endogenous Well Location," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 29(1), pages 181-196, January.
    11. Hanan G. Jacoby & Ghazala Mansuri, 2018. "Governing the Commons? Water and Power in Pakistan’s Indus Basin," Working Papers id:12933, eSocialSciences.
    12. Kahsay, Goytom Abraha & Medhin, Haileselassie, 2020. "Leader turnover and forest management outcomes: Micro-level evidence from Ethiopia," World Development, Elsevier, vol. 127(C).
    13. Uri Shani & Yacov Tsur & Amos Zemel & David Zilberman, 2009. "Irrigation production functions with water‐capital substitution," Agricultural Economics, International Association of Agricultural Economists, vol. 40(1), pages 55-66, January.
    14. James Roumasset & Christopher Wada, 2012. "The Economics of Groundwater," Working Papers 201211, University of Hawaii at Manoa, Department of Economics.
    15. Stergios Athanassoglou & Glenn Sheriff & Tobias Siegfried & Woonghee Huh, 2012. "Optimal Mechanisms for Heterogeneous Multi-Cell Aquifers," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 52(2), pages 265-291, June.
    16. AZOMAHOU, Théophile & BOUCEKKINE, Raouf & NGUYEN-VAN, Phu, 2009. "Promoting clean technologies under imperfect competition," LIDAM Discussion Papers CORE 2009011, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    17. Victoria Gunnarsson & Peter F. Orazem & Mario A. Sánchez & Aimee Verdisco, 2009. "Does Local School Control Raise Student Outcomes? Evidence on the Roles of School Autonomy and Parental Participation," Economic Development and Cultural Change, University of Chicago Press, vol. 58(1), pages 25-52, October.
    18. Sueyoshi, Toshiyuki, 2010. "An agent-based approach equipped with game theory: Strategic collaboration among learning agents during a dynamic market change in the California electricity crisis," Energy Economics, Elsevier, vol. 32(5), pages 1009-1024, September.
    19. Trillas, Francesc, 2010. "Electricity and telecoms reforms in the EU: Insights from the economics of federalism," Utilities Policy, Elsevier, vol. 18(2), pages 66-76, June.
    20. Saplacan, Roxana, 2008. "Competition in electricity distribution," Utilities Policy, Elsevier, vol. 16(4), pages 231-237, December.

    More about this item

    Keywords

    infrastructure; market power; spatial models; vertical integration; water markets;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

    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:ris:albaec:2009_008. 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: (Joseph Marchand). General contact details of provider: http://edirc.repec.org/data/deualca.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.