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Property rights and western United States water markets *
Author(s) -
Donohew Zachary
Publication year - 2009
Publication title -
australian journal of agricultural and resource economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.683
H-Index - 49
eISSN - 1467-8489
pISSN - 1364-985X
DOI - 10.1111/j.1467-8489.2007.00427.x
Subject(s) - interdependence , water trading , property rights , water scarcity , american west , agriculture , scarcity , business , water resources , natural resource economics , economics , market economy , water conservation , microeconomics , political science , law , geography , history , ecology , ethnology , archaeology , biology
This paper addresses water scarcity issues in the American West and examines the allocation of water through the appropriative rights system and the extent markets are used to reallocate water from low‐ to high‐valued uses. The unique physical properties of water make it difficult to bound and measure, which makes defining property rights difficult. Markets are also impeded by disputes over third‐party effects due to the interdependencies of water users and complex institutional arrangements that dilute decision‐making authority. Analysis of water trading in the western United States indicates that the rate of permanent transfers is increasing over time and urban users are paying higher prices relative to agricultural users.