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In the State of Georgia, any agricultural producer who wishes to pump more than 100,000 gallons of water a day for crop irrigation is required to have an irrigation permit. The permit stays with the land and in the event of sale the permit is transferred with the property. Until recently, permits were essentially granted freely to all applicants in the Flint River water basin, without limit. In 1999, however, with increasing demand for water from growing urban Atlanta and several years of drought in the Southeast, the state of Georgia placed a moratorium on the issuance of agricultural water permits in the Flint River basin. This research exploits this policy change within a hedonic pricing framework to estimate the value of irrigation rights in the Southeast US. While the value of irrigation rights has been studied extensively in the western US, differences in property rights and legal regimes, as well as a lack of established water-rights markets in the East, leave us with little information regarding the value of irrigation rights in this setting.

Estimating the Value of Water Use Permits: A Hedonic Approach Applied to Farmland in the Southeastern Us