IDEAS home Printed from https://ideas.repec.org/a/spr/waterr/v30y2016i8d10.1007_s11269-016-1296-8.html
   My bibliography  Save this article

The Water Markets as Effective Tools of Managing Water Shortages in an Irrigation District

Author

Listed:
  • J. Alarcón

    (Universidad Politécnica de Madrid)

  • L. Juana

    (Universidad Politécnica de Madrid)

Abstract

In this work, the efficiency of water markets in an irrigation district is put under consideration. This efficiency is referred to the private economic losses arising from a reduction in the availability of water, so the most efficient or optimal allocation will be the one that minimizes these losses or the one that provides the maximum private benefit. On this view, the optimal allocation has been studied in an irrigation community, and it has been compared with the rule of fixing a same quota and the proportional reduction. Besides, from the water allocation made by these last two rules, a water market has been simulated. Formulation for all of them is provided. Results show that water markets will improve the suboptimal allocation made by the rule of fixing a same quota and the proportional rule, even when transaction costs are high. They also show that, mostly, the greater the water restrictions, the greater are the gains from trade. It can be inferred too that, as long as all determinants have been taken into account and transaction costs are low enough, the aggregate losses of income ensuing from any prescribed water reduction will be the lowest both by means of the optimal allocation as with a market. Anyhow, results and conclusions clearly dependent on the relations made between allocations and crop yields.

Suggested Citation

  • J. Alarcón & L. Juana, 2016. "The Water Markets as Effective Tools of Managing Water Shortages in an Irrigation District," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(8), pages 2611-2625, June.
    • Handle: RePEc:spr:waterr:v:30:y:2016:i:8:d:10.1007_s11269-016-1296-8
    DOI: 10.1007/s11269-016-1296-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11269-016-1296-8
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11269-016-1296-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    References listed on IDEAS

    as
    1. Goetz, Renan-Ulrich & Martinez, Yolanda Martinez & Rodrigo, Jofre, 2005. "Eficiencia de las reglas de asignacion de agua en el regadio: asignacion a traves de mercados, de la regla proporcional y de la regla uniforme," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 5(09), pages 1-24.
    2. H. Lu & G. Huang & Y. Lin & L. He, 2009. "A Two-Step Infinite α-Cuts Fuzzy Linear Programming Method in Determination of Optimal Allocation Strategies in Agricultural Irrigation Systems," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 23(11), pages 2249-2269, September.
    3. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    4. M. Babel & A. Gupta & D. Nayak, 2005. "A Model for Optimal Allocation of Water to Competing Demands," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 19(6), pages 693-712, December.
    5. Blanco-Gutiérrez, Irene & Varela-Ortega, Consuelo & Flichman, Guillermo, 2011. "Cost-effectiveness of groundwater conservation measures: A multi-level analysis with policy implications," Agricultural Water Management, Elsevier, vol. 98(4), pages 639-652, February.
    6. R. Quentin Grafton & James Horne & Sarah Ann Wheeler, 2016. "On the Marketisation of Water: Evidence from the Murray-Darling Basin, Australia," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(3), pages 913-926, February.
    7. Shangguan, Zhouping & Shao, Mingan & Horton, Robert & Lei, Tingwu & Qin, Lin & Ma, Jianqing, 2002. "A model for regional optimal allocation of irrigation water resources under deficit irrigation and its applications," Agricultural Water Management, Elsevier, vol. 52(2), pages 139-154, January.
    8. Alberto Solís & Xueqin Zhu, 2015. "Water Markets: Insights from an Applied General Equilibrium Model for Extremadura, Spain," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 29(12), pages 4335-4356, September.
    9. Molle, François & Berkoff, J., 2006. "Cities versus agriculture: revisiting intersectoral water transfers, potential gains and conflicts," IWMI Research Reports H038722, International Water Management Institute.
    10. Rajendra Poddar & M. Qureshi & Tian Shi, 2014. "A Comparison of Water Policies for Sustainable Irrigation Management: The Case of India and Australia," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 28(4), pages 1079-1094, March.
    11. S. Wang & G. Huang, 2012. "Identifying Optimal Water Resources Allocation Strategies through an Interactive Multi-Stage Stochastic Fuzzy Programming Approach," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(7), pages 2015-2038, May.
    12. Benli, Bogachan & Kodal, Suleyman, 2003. "A non-linear model for farm optimization with adequate and limited water supplies: Application to the South-east Anatolian Project (GAP) Region," Agricultural Water Management, Elsevier, vol. 62(3), pages 187-203, October.
    13. Paritosh Srivastava & Raj Singh, 2015. "Optimization of Cropping Pattern in a Canal Command Area Using Fuzzy Programming Approach," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 29(12), pages 4481-4500, September.
    14. Jouravlev, Andrei & Lee, Terence R., 1998. "Prices, property and markets in water allocation," Medio Ambiente y Desarrollo 5735, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    15. Arriaza Balmón, Manuel & Gomez-Limon, Jose A. & Upton, Martin, 1997. "Local water markets for irrigation in southern Spain: A multicriteria approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(01), pages 1-23.
    16. Garrick, Dustin & Whitten, Stuart M. & Coggan, Anthea, 2013. "Understanding the evolution and performance of water markets and allocation policy: A transaction costs analysis framework," Ecological Economics, Elsevier, vol. 88(C), pages 195-205.
    17. Mojtaba Sadegh & Reza Kerachian, 2011. "Water Resources Allocation Using Solution Concepts of Fuzzy Cooperative Games: Fuzzy Least Core and Fuzzy Weak Least Core," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 25(10), pages 2543-2573, August.
    18. Molle, Francois & Berkoff, Jeremy, 2006. "Cities versus agriculture: Revisiting intersectoral water transfers, potential gains and conflicts," IWMI Research Reports 91817, International Water Management Institute.
    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. Z. Ghaffari Moghadam & E. Moradi & M. Hashemi Tabar & A. Sardar Shahraki, 2023. "Developing a Bi-level programming model for water allocation based on Nerlove’s supply response theory and water market," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(6), pages 5663-5689, June.
    2. Min Ge & Fengping Wu & Xiaoping Chen, 2018. "Using Multiple Discriminant Analysis for the Assignment of Initial Water Entitlements at River Basin-Level under the Strictest Water Resources Management System Constraints in China," Sustainability, MDPI, vol. 10(12), pages 1-17, November.
    3. Aghaie, Vahid & Alizadeh, Hosein & Afshar, Abbas, 2020. "Agent-Based hydro-economic modelling for analysis of groundwater-based irrigation Water Market mechanisms," Agricultural Water Management, Elsevier, vol. 234(C).
    4. Duan, Yeqing & Zhou, Shenbei & He, Jiangping & Bai, Minghao, 2024. "Improving the performance of agricultural temporary water markets: The role of technology-based and transaction-based subsidies," Agricultural Water Management, Elsevier, vol. 303(C).
    5. Cuimei Lv & Huiqin Li & Minhua Ling & Xi Guo & Zening Wu & Changkuan Gu & Yang Li, 2021. "An Innovative Emergy Quantification Method for Eco-economic Compensation for Agricultural Water Rights Trading," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 35(3), pages 775-792, 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. Javier Alarcón & Alberto Garrido & Luis Juana, 2014. "Managing Irrigation Water Shortage: a Comparison Between Five Allocation Rules Based on Crop Benefit Functions," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 28(8), pages 2315-2329, June.
    2. M. Habibi Davijani & M. E. Banihabib & A. Nadjafzadeh Anvar & S. R. Hashemi, 2016. "Multi-Objective Optimization Model for the Allocation of Water Resources in Arid Regions Based on the Maximization of Socioeconomic Efficiency," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(3), pages 927-946, February.
    3. Molle, Francois & Berkoff, Jeremy, 2007. "Water pricing in irrigation: the lifetime of an idea," Book Chapters,, International Water Management Institute.
    4. Chunlong Li & Jianzhong Zhou & Shuo Ouyang & Chao Wang & Yi Liu, 2015. "Water Resources Optimal Allocation Based on Large-scale Reservoirs in the Upper Reaches of Yangtze River," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 29(7), pages 2171-2187, May.
    5. Palomo-Hierro, Sara & Loch, Adam & Pérez-Blanco, C. Dionisio, 2022. "Improving water markets in Spain: Lesson-drawing from the Murray-Darling Basin in Australia," Agricultural Water Management, Elsevier, vol. 259(C).
    6. Abbas Amini Fasakhodi & Seyed Nouri & Manouchehr Amini, 2010. "Water Resources Sustainability and Optimal Cropping Pattern in Farming Systems; A Multi-Objective Fractional Goal Programming Approach," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 24(15), pages 4639-4657, December.
    7. Scheierling, Susanne M., 2011. "Assessing the direct economic effects of reallocating irrigation water to alternative uses : concepts and an application," Policy Research Working Paper Series 5797, The World Bank.
    8. Molden, David & Oweis, T. Y. & Pasquale, S. & Kijne, Jacob W. & Hanjra, M. A. & Bindraban, P. S. & Bouman, Bas A. M. & Cook, S. & Erenstein, O. & Farahani, H. & Hachum, A. & Hoogeveen, J. & Mahoo, Hen, 2007. "Pathways for increasing agricultural water productivity," Book Chapters,, International Water Management Institute.
    9. Tellioglu, Isin & Konandreas, Panos, 2017. "Agricultural Policies, Trade and Sustainable Development in Egypt," National Policies, Trade and Sustainable Development 320158, International Centre for Trade and Sustainable Development (ICTSD).
    10. Coggan, Anthea & Buitelaar, Edwin & Whitten, Stuart & Bennett, Jeff, 2013. "Factors that influence transaction costs in development offsets: Who bears what and why?," Ecological Economics, Elsevier, vol. 88(C), pages 222-231.
    11. Patel, Ankit & Krishnan, Sunderrajan, 2009. "Groundwater situation in urban India: overview, opportunities and challenges," Book Chapters,, International Water Management Institute.
    12. Wegelin, Philipp & von Arx, Widar, 2016. "The impact of alternative governance forms of regional public rail transport on transaction costs. Case evidence from Germany and Switzerland," Research in Transportation Economics, Elsevier, vol. 59(C), pages 133-142.
    13. Patel, Ankit & Krishnan, Sunderrajan, 2009. "Groundwater situation in urban India: overview, opportunities and challenges," IWMI Books, Reports H042047, International Water Management Institute.
    14. Fan, Shengyue & Yang, Jinfei & Liu, Wenwen & Wang, He, 2019. "Institutional Credibility Measurement Based on Structure of Transaction Costs: A Case Study of Ongniud Banner in the Inner Mongolia Autonomous Region," Ecological Economics, Elsevier, vol. 159(C), pages 212-225.
    15. S. Dutta & B.C. Sahoo & Rajashree Mishra & S. Acharya, 2016. "Fuzzy Stochastic Genetic Algorithm for Obtaining Optimum Crops Pattern and Water Balance in a Farm," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(12), pages 4097-4123, September.
    16. McCann, Laura, 2013. "Transaction costs and environmental policy design," Ecological Economics, Elsevier, vol. 88(C), pages 253-262.
    17. Gomez-Limon, Jose Antonio & Berbel, Julio & Arriaza Balmón, Manuel, 2005. "MCDM Farm System Analysis for Public Management of Irrigated Agriculture," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24676, European Association of Agricultural Economists.
    18. Castillo, G. E. & Namara, Regassa & Ravnborg, H. M. & Hanjra, M. A. & Smith, L. & Hussein, M. H. & Bene, Christopher & Cook, S. & Hirsch, D. & Polak, P. & Valee, Domitille & van Koppen, Barbara, 2007. "Reversing the flow: agricultural water management pathways for poverty reduction," Book Chapters,, International Water Management Institute.
    19. Pant, Dhruba & Bhattarai, Madhusudan & Basnet, Govinda, 2008. "Implications of bulk water transfer on local water management institutions: A case study of the Melamchi Water Supply Project in Nepal," CAPRi working papers 78, International Food Policy Research Institute (IFPRI).
    20. Ajay Singh, 2016. "Optimal Allocation of Resources for Increasing Farm Revenue under Hydrological Uncertainty," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(7), pages 2569-2580, May.

    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:spr:waterr:v:30:y:2016:i:8:d:10.1007_s11269-016-1296-8. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.