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Water and Land as Quantity-Rationed Inputs in California Agriculture: Empirical Tests and Water Policy Implications

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  • Michael R. Moore
  • Ariel Dinar

Abstract

This paper evaluates competing models of input use for two inputs, surface water and land, in central California agriculture. Applying a model of the multiproduct firm, a variable input model is compared to a fixed input model using model specification tests. Test results support the fixed input model for both surface water and land. The finding that surface water is a quantity-rationed input addresses an important water policy issue, implementation of the Central Valley Project Improvement Act. Water rationing has implications for three key provisions of the act involving water price increases, water marketing, and water supply restrictions.

Suggested Citation

  • Michael R. Moore & Ariel Dinar, 1995. "Water and Land as Quantity-Rationed Inputs in California Agriculture: Empirical Tests and Water Policy Implications," Land Economics, University of Wisconsin Press, vol. 71(4), pages 445-461.
    • Handle: RePEc:uwp:landec:v:71:y:1995:i:4:p:445-461
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    Cited by:

    1. Chatterjee, Diti & Dinar, Ariel & González-Rivera, Gloria, 2019. "Impact of Agricultural Extension on Irrigated Agriculture Production and Water Use in California," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2019.
    2. Moolman, C.E. & Blignaut, J.N. & van Eyden, R., 2006. "Modelling the marginal revenue of water in selected agricultural commodities: A panel data approach," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 45(1), pages 1-11, March.
    3. Schuck, Eric C. & Green, Gareth P. & Sunding, David L., 2000. "Irrigation Water Rate Reform And Endogenous Technological Change," 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia 36463, Western Agricultural Economics Association.
    4. Lichtenberg, Erik, 2002. "Agriculture and the environment," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 23, pages 1249-1313, Elsevier.
    5. Ranjan, Ram & Gollehon, Noel R. & Aillery, Marcel P., 2004. "Explaining Participation in Spot and Options Markets for Water," Working Papers 15650, University of Florida, International Agricultural Trade and Policy Center.
    6. Crase, Lin & Dollery, Brian & Lockwood, Michael, 2001. "Towards an Understanding of Static Transaction Costs in the NSW Permanent Water Market: An Application of Choice Modelling," 2001 Conference (45th), January 23-25, 2001, Adelaide, Australia 125588, Australian Agricultural and Resource Economics Society.
    7. Olen, Beau & Wu, JunJie & Langpap, Christian, 2012. "Crop-specific Irrigation Choices for Major Crops on the West Coast: Water Scarcity and Climatic Determinants," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124843, Agricultural and Applied Economics Association.
    8. World Bank, 2001. "India : Power Supply to Agriculture, Volume 1. Summary Report," World Bank Publications - Reports 15288, The World Bank Group.
    9. Iglesias Pinedo, Wilman J., 2021. "The impact of Renewable Energy Standards on the biomass supply and agricultural land demand in the US Great Plains Region," 2021 Annual Meeting, August 1-3, Austin, Texas 314085, Agricultural and Applied Economics Association.
    10. Vicente Ruiz, 2016. "Groundwater Overdraft, Electricity, and Wrong Incentives: Evidence from Mexico," Working Papers 2016.05, FAERE - French Association of Environmental and Resource Economists.
    11. Shumway, C. Richard, 1995. "Recent Duality Contributions In Production Economics," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(1), pages 1-17, July.
    12. Manuel Martín Rodríguez & Francisco Javier Sáez Fernández & Juan Alberto Aragón Correa & Elías Melchor Ferrer & Noelina Rodríguez Ferrero, 2002. "Evaluation of irrigation projects and water resource management: a methodological proposal," Sustainable Development, John Wiley & Sons, Ltd., vol. 10(2), pages 90-102.
    13. Letort, Elodie & Carpentier, Alain, 2010. "Variable Input Allocation: Why Heterogeneity Matters?," 120th Seminar, September 2-4, 2010, Chania, Crete 109387, European Association of Agricultural Economists.
    14. Diane Dupont & Steven Renzetti, 2001. "The Role of Water in Manufacturing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 18(4), pages 411-432, April.

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