The effects of spot water markets on the economic risk derived from variable water supply
Knowledge Area
Economía, Sociología y Política AgrariaPublication date
2003-08Publisher
International Association of Agricultural Economists (IAAE)Bibliographic Citation
CALATRAVA LEYVA, Javier y GARRIDO COLMENERO, 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. P. 18.Keywords
Mercados del aguaRiesgo económico
Disponibilidad del agua
Agricultura de regadio
Abstract
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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