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Valuing Water Supply Reliability
Author(s) -
Griffin Ronald C.,
Mjelde James W.
Publication year - 2000
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/0002-9092.00035
Subject(s) - water supply , reliability (semiconductor) , consistency (knowledge bases) , environmental economics , risk analysis (engineering) , water resource management , business , computer science , economics , environmental science , environmental engineering , power (physics) , physics , quantum mechanics , artificial intelligence
Instead of creating water supply systems that fully insulate mankind from climate‐imposed water deficiencies, it is possible that for municipal water systems a nonzero probability of water supply shortfall is efficient. Perfect water supply reliability, meaning no chance of future shortfall, is not optimal when water development costs are high. Designing an efficient strategy requires an assessment of consumer preferences pertaining to the reliability of water supply. Contingent valuations of both current and future shortfalls are reported. The consistency of these measures is gauged using an expected utility model.