Open AccessPrice Evaluation and Allocation of Water under Alternative Water Rights Systems
Author(s) -
David Zilberman,
Eithan Hochman
Publication year - 1992
Language(s) - English
Resource type - Reports
DOI - 10.32747/1992.7561062.bard
Subject(s) - water scarcity , transaction cost , water trading , flexibility (engineering) , scarcity , water resources , natural resource economics , business , water use , water conservation , environmental economics , water right , economics , microeconomics , finance , ecology , management , biology
This project developed conceptual and empirical frameworks to analyze the water management politics as water scarcity increases. The analyses showed that increased scarcity will tend to encourage a transition from systems in which water is allocated administratively to water trading. However, transaction costs and political economy considerations placed barriers on the introduction of markets. The recent droughts - both in Israel and California were shown to cause an increase in water use efficiency by adoption of modern technologies and improvement of water conveyance systems. The drought led to institutional innovations and an increased reliance on trading as mechanisms for water allocation. Case studies from both countries demonstrate that reducing barriers to water trading and increasing farmers' flexibility in exchange of water will lead to efficient outcomes and much better uses of existing water resources.