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Assessing a Policy Grab Bag: Federal Water Policy Reform
Author(s) -
Weinberg Marca
Publication year - 2002
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 - 10.1111/1467-8276.00318
Subject(s) - allocative efficiency , water pricing , context (archaeology) , incentive , revenue , economics , policy analysis , agricultural policy , agriculture , public economics , business , natural resource economics , environmental economics , microeconomics , water resources , water conservation , finance , public administration , ecology , paleontology , political science , biology
Abstract This article examines the economic impacts of policy alternatives for addressing allocative inefficiencies among agricultural, urban, and environmental uses of federal water. The Central Valley Project Improvement Act, composed of multiple incentive‐based and command‐and‐control policies, forms the context for this analysis. Estimated multi‐output agricultural revenue functions and urban water demand functions are incorporated into a nonlinear programming model designed to predict changes in water use, returns to agriculture, and urban consumer surplus. Results suggest that analysis that does not explicitly model policy instruments implemented at sub‐optimal levels and, as part of a package of reforms, could over‐ or underestimate the costs, benefits, and effectiveness of each policy instrument.