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Influence of Climate Variability on the Market Price of Water in the Gila-San Francisco Basin

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  • Pullen, Jennifer L.
  • Colby, Bonnie G.

Abstract

Emerging water markets in the western United States have slowly developed as usage patterns have changed over time. This article develops an econometric model for the Gila-San Francisco Basin. Results indicate the market price of water has risen in response to drought and market conditions. Analysis shows a statistically significant relationship between the price and quantity of water transferred, year the transaction occurred, location where the transaction occurred, new use of the water right, and whether the transaction occurred during a drought year. Using the Standard Precipitation Index, we find negotiated prices are higher during dry years.

Suggested Citation

  • Pullen, Jennifer L. & Colby, Bonnie G., 2008. "Influence of Climate Variability on the Market Price of Water in the Gila-San Francisco Basin," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(3), pages 1-15.
    • Handle: RePEc:ags:jlaare:46568
    DOI: 10.22004/ag.econ.46568
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    References listed on IDEAS

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    1. Raymond B. Palmquist, 1989. "Land as a Differentiated Factor of Production: A Hedonic Model and Its Implications for Welfare Measurement," Land Economics, University of Wisconsin Press, vol. 65(1), pages 23-28.
    2. John Faux & Gregory M. Perry, 1999. "Estimating Irrigation Water Value Using Hedonic Price Analysis: A Case Study in Malheur County, Oregon," Land Economics, University of Wisconsin Press, vol. 75(3), pages 440-452.
    3. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, December.
    4. Jan P. Crouter, 1987. "Hedonic Estimation Applied to a Water Rights Market," Land Economics, University of Wisconsin Press, vol. 63(3), pages 259-271.
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    Cited by:

    1. G. Donoso & O. Melo & C. Jordán, 2014. "Estimating Water Rights Demand and Supply: Are Non-market Factors Important?," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 28(12), pages 4201-4218, September.
    2. Jingjing Wang & Xiaoyang Wang, 2023. "Why is water illiquid?: The NQH2O water index futures," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 45(1), pages 602-621, March.
    3. Colby, Bonnie, 2020. "Acquiring environmental flows: ecological economics of policy development in western U.S," Ecological Economics, Elsevier, vol. 173(C).
    4. Rowan Isaaks & Bonnie Colby, 2019. "Empirical Application of Rubinstein Bargaining Model in Western U.S. Water Transactions," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 6(01), pages 1-25, September.
    5. Bigelow, Daniel P. & Zhang, Hongliang, 2018. "Supplemental irrigation water rights and climate change adaptation," Ecological Economics, Elsevier, vol. 154(C), pages 156-167.
    6. Francis Carlo Petterini, 2018. "The Likelihood Of A Water Market In Brazil," Anais do XLIV Encontro Nacional de Economia [Proceedings of the 44th Brazilian Economics Meeting] 190, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    7. Sheng, Jichuan & Cheng, Qian & Yang, Hongqiang, 2024. "Water markets and water inequality: China's water rights trading pilot," Socio-Economic Planning Sciences, Elsevier, vol. 94(C).

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