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This research paper analyzes the economics of deficit irrigation based on the use of subjective estimates of the crop yield–water relationship to determine water supply in irrigated olive groves. Interviewed farmers were asked to give three estimates for the yield-water relationship as a function of water supply (full irrigation, usual deficit irrigation and extreme deficit irrigation). Those responses are contrasted with the actual irrigation dose and the results appear to support the hypothesis that a majority of farmers use deficit irrigation as a strategy that maximizes the value of limited water input rather than the conventional microeconomic behavior of maximizing the return to land

Microeconomics of Deficit Irrigation and Subjective Water Response Function for Intensive Olive Groves