The effects of spot water markets on the economic risk derived from variable water supply
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Knowledge AreaEconomía, Sociología y Política Agraria
PublisherInternational Association of Agricultural Economists (IAAE)
Bibliographic CitationCALATRAVA, Javier, GARRIDO, Alberto. The effects of spot water markets on the economic risk derived from variable water supply. En: International Conference of Agricultural Economists (25th: 2003: Durban, South Africa ). 25th International Conference of Agricultural Economists, August 16-22, 2003, Durban, South Africa. 2003. 18p.
KeywordsMercados del agua
Disponibilidad del agua
Agricultura de regadio
Water availability in semiarid regions commonly exhibits patterns of extreme variability. Even in basins with large infrastructure development, some users are subject to low levels of water reliability, incurring economic losses during periods of scarcity. More flexible instruments, such as voluntary exchanges of water among users, may help users reduce their risk exposure. Recent changes in the Spanish water Law have given an initial impulse to allow for lease-out contracts of water use rights. This paper analyses, from theoretical and empirical standpoints, the effect that establishing water markets has on the economic risk caused by water availability variations. The empirical study is performed on an irrigation district of the Guadalquivir Valley (Spain) with fair levels of average water availability but a high probability of periods of extreme scarcity. A non-linear programming model is used to simulate irrigators’ behaviour and derive water demand functions. Another ...
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