Open AccessECONOMICS AND THE MODELING OF WATER RESOURCES AND POLICIES
Author(s) -
BOOKER JAMES F.,
HOWITT RICHARD E.,
MICHELSEN ARI M.,
YOUNG ROBERT A.
Publication year - 2012
Publication title -
natural resource modeling
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.28
H-Index - 32
eISSN - 1939-7445
pISSN - 0890-8575
DOI - 10.1111/j.1939-7445.2011.00105.x
Subject(s) - valuation (finance) , scope (computer science) , incentive , interdependence , water resources , environmental economics , economic model , water supply , environmental resource management , economics , computer science , environmental science , ecology , microeconomics , biology , finance , environmental engineering , political science , law , programming language
Abstract Over the last 25 years, economic water policy models have evolved in concept, theoretical and technical methods, scope and application to address a host of water demand, supply, and management policy questions. There have been a number of theoretical and empirical advances over this period, particularly related to estimation of nonmarket, public good water‐related values involving different methods of valuation. We discuss modeling advances including modeling multiple, competing demands, types of incentives and technologies and behavioral responses, incorporation of groundwater and other supply alternatives, integration of institutional factors, and increasing attention to system‐wide impacts. The largest changes in hydroeconomic policy models have been the integration of the individual demand and supply components, inclusion of environmental values, incorporation of governance and institutional conditions (laws, regulations and policies), and expansion to river basin and even interposing scales of analysis. Important areas of future hydroeconomic model advances will be the use of genetic and neurological based algorithms for solving dynamic, stochastic problems, reconstruction of hydrological and economic relationships for remotely sensed data, and the expansion of models to understand and address transboundary water resource economic, hydrologic, environmental and institutional policy, and interdependencies.