Determining the Price-Responsiveness of Demands for Irrigation Water Deliveries versus Consumptive Use
By: Scheierling, Susanne M.; Young, Robert A.; Cardon, Grant E.
Scheierling, Susanne M.; Young, Robert A.; Cardon, Grant E., Determining the Price-Responsiveness of Demands for Irrigation Water Deliveries versus Consumptive Use, Journal of Agricultural and Resource Economics, Volume 29, Issue 2, August 2004, Pages 328-345
A water-crop simulation/mathematical programming model of irrigation water demand in northeastern Colorado is formulated to develop an original concept of derived demand for consumptive use of water. Conventional demand functions for water deliveries are also developed, and the effect of hypothetical price increases on both consumption and delivery are illustrated. Findings indicate that demand elasticity estimates are quite sensitive to model specification, and consumptive use demand tends to be significantly less price-responsive than delivery demand. Thus price incentives are likely to have only limited impacts on basin-wide water consumption and would not make much additional water available for emerging demands.