Modelling spot water markets under uncertain water supply
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Knowledge AreaEconomía, Sociología y Política Agraria
PublisherEuropean Association of Agricultural Economists (EAAE)
Bibliographic CitationCALATRAVA LEYVA, Javier, GARRIDO, Alberto. Modelling spot water markets under uncertain water supply. En: Congress of European Association of Agricultural Economists (10th: 2002: Zaragoza). Xth Congress of the European Association of Agricultural Economists: Exploring diversity in the European Agri-Food System. Zaragoza: European Association of Agricultural Economists. 2002. 14p.
Modelización de cultivos
Mercados del agua
Abastecimiento de agua
Water availability in semiarid regions usually exhibits patterns of extreme variability. Even in intensively controlled basins, some users are subject to low levels of water reliability, and more vulnerable to periods of extreme scarcity. To reduce their risk exposure more flexible instruments, such as voluntary exchanges of water among users, are required. Recent changes in the Spanish water Law have given an initial impulse to allow for leases of water use rights. Properly designed and monitored, this instrument provides some flexibility to water management, and may increase the economic use efficiency as well as mitigate the adverse economic effects of droughts. This paper looks at the risks and uncertainty dimensions of water markets, which have not been paid much attention in the literature. It analyses, from theoretical and empirical standpoints, the role that uncertainty plays in market participants’ decisions and its impact on gains from trade. Two models have been ...
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