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PRICE BEHAVIOR IN THE WATER MARKET OF NORTHEASTERN COLORADO 1
Author(s) -
Gardner Richard L.,
Miller Thomas A.
Publication year - 1983
Publication title -
jawra journal of the american water resources association
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.957
H-Index - 105
eISSN - 1752-1688
pISSN - 1093-474X
DOI - 10.1111/j.1752-1688.1983.tb02770.x
Subject(s) - economics , asset (computer security) , value (mathematics) , irrigation , agricultural economics , environmental science , business , mathematics , ecology , statistics , computer security , computer science , biology
Past prices of Colorado‐Big Thompson water shares were analyzed using an asset pricing model which incorporated the growth rate in real returns to irrigation water and the value of potential urban water uses. A real growth rate in the returns to irrigation water was estimated at 5.3 percent. Nevertheless, market values for water shares have exceeded capitalized agricultural values since 1969. Historically, urban use potential was heavily discounted, but the implicit discount rate fell rapidly in the last decade. The expectation that water shares will eventually be sold to municipal or industrial consumers now appears to be reflected fully in water prices.