IDEAS home Printed from https://ideas.repec.org/a/eee/dyncon/v33y2009i2p463-476.html
   My bibliography  Save this article

Water allocation under distribution losses: Comparing alternative institutions

Author

Listed:
  • Chakravorty, Ujjayant
  • Hochman, Eithan
  • Umetsu, Chieko
  • Zilberman, David

Abstract

The distribution of water resources is characterized by increasing returns to scale. Distribution links 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," Journal of Economic Dynamics and Control, Elsevier, vol. 33(2), pages 463-476, February.
    • Handle: RePEc:eee:dyncon:v:33:y:2009:i:2:p:463-476
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165-1889(08)00131-0
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. 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.
    4. Penelope Brook Cowen & Tyler Cowen, 1998. "Deregulated Private Water Supply: A Policy Option for Developing Countries," Cato Journal, Cato Journal, Cato Institute, vol. 18(1), pages 21-41, Spring/Su.
    5. Robert Wilson, 2002. "Architecture of Power Markets," Econometrica, Econometric Society, vol. 70(4), pages 1299-1340, July.
    6. Wade, Robert, 1987. "The Management of Common Property Resources: Collective Action as an Alternative to Privatisation or State Regulation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 11(2), pages 95-106, June.
    7. 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.
    8. 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. Harold Houba & Françeska Tomori, 2023. "Stackelberg Social Equilibrium in Water Markets," Games, MDPI, vol. 14(4), pages 1-9, July.
    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. 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.
    4. Françeska Tomori & Erik Ansink & Harold Houba & Nick Hagerty & Charles Bos, 2024. "Market power in California's water market," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(3), pages 1274-1299, May.
    5. David Zilberman & Alice Huang & Lanie Goldberg & Thomas Reardon, 2023. "The evolution of symbiotic innovation, water, and agricultural supply chains," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 45(3), pages 1592-1603, September.
    6. Zilberman, David & Huang, Alice & Reardon, Thomas A., 2022. "The evolution of symbiotic innovation, water, and agricultural supply chains," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322753, Agricultural and Applied Economics Association.
    7. Ansink, Erik & Houba, Harold, 2012. "Market power in water markets," Journal of Environmental Economics and Management, Elsevier, vol. 64(2), pages 237-252.
    8. 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.
    9. Krebs, Vanessa & Schmidt, Martin, 2018. "Uniqueness of market equilibria on networks with transport costs," Operations Research Perspectives, Elsevier, vol. 5(C), pages 169-173.
    10. Tomori, Françeska & Ansink, Erik & Houba, Harold & Hagerty, Nick & Bos, Charles, 2021. "Market power in California’s water market," Working Papers 2072/534854, Universitat Rovira i Virgili, Department of Economics.
    11. 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.
    12. Caravaggio, Andrea & De Cesare, Luigi & Di Liddo, Andrea, 2024. "Socio-economic determinants of pricing water for domestic use: A comparison of blocks and linear tariffs," Socio-Economic Planning Sciences, Elsevier, vol. 93(C).
    13. Zilberman, David & Kaplan, Scott & Huang, Alice & Goldberg, Lanie, 2023. "Teaching Water Economics Using Dynamics and a Political Economy Framework," Applied Economics Teaching Resources (AETR), Agricultural and Applied Economics Association, vol. 5(3), September.
    14. 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, 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. Antonio Estache & L. Wren-Lewis, 2008. "Towards a Theory of Regulation for Developing Countries: Following Laffont's Lead," Working Papers ECARES 2008_018, ULB -- Universite Libre de Bruxelles.
    3. Hassanzadeh Moghimi, Farzad & Boomsma, Trine K. & Siddiqui, Afzal S., 2024. "Transmission planning in an imperfectly competitive power sector with environmental externalities," Energy Economics, Elsevier, vol. 134(C).
    4. 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).
    5. Farzad Hassanzadeh Moghimi & Yihsu Chen & Afzal S. Siddiqui, 2023. "Flexible supply meets flexible demand: prosumer impact on strategic hydro operations," Computational Management Science, Springer, vol. 20(1), pages 1-35, December.
    6. 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.
    7. 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.
    8. CHAKRAVORTY Ujjayant & UMETSU Chieko & ZILBERMAN David, 2010. "Spatial Water Management under Alternative Institutional Arrangements," EcoMod2003 330700034, EcoMod.
    9. 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.
    10. Cao, Chunfang & Li, Xiaoyang & Xia, Changyuan, 2021. "The complicit role of local government authorities in corporate bribery: Evidence from a tax collection reform in China," China Economic Review, Elsevier, vol. 65(C).
    11. Abhilas Pradhan & Rabinarayan Patra, 2013. "Heterogeneity, collective action and management sustainability in common property forest resources: case study from the Indian state Odisha," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 15(4), pages 979-997, August.
    12. 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.
    13. Megy, Camille & Massol, Olivier, 2023. "Is Power-to-Gas always beneficial? The implications of ownership structure," Energy Economics, Elsevier, vol. 128(C).
    14. 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.
    15. 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.
    16. Kahsay, Goytom Abraha & Medhin, Haileselassie, 2020. "Leader turnover and forest management outcomes: Micro-level evidence from Ethiopia," World Development, Elsevier, vol. 127(C).
    17. Fazekas,Mihály & Blum,Jurgen Rene, 2021. "Improving Public Procurement Outcomes : Review of Tools and the State of the Evidence Base," Policy Research Working Paper Series 9690, The World Bank.
    18. James Roumasset & Christopher Wada, 2012. "The Economics of Groundwater," Working Papers 201211, University of Hawaii at Manoa, Department of Economics.
    19. 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.
    20. 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).

    More about this item

    Keywords

    Infrastructure Market power Spatial models Vertical integration Water markets;

    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:eee:dyncon:v:33:y:2009:i:2:p:463-476. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jedc .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.