RURAL-TO-URBAN WATER TRANSFERS: MEASURING DIRECT FOREGONE BENEFITS OF IRRIGATION WATER UNDER UNCERTAIN WATER SUPPLIES
By: Taylor, R. Garth; Young, Robert A.
Taylor, R. Garth; Young, Robert A., RURAL-TO-URBAN WATER TRANSFERS: MEASURING DIRECT FOREGONE BENEFITS OF IRRIGATION WATER UNDER UNCERTAIN WATER SUPPLIES, Journal of Agricultural and Resource Economics, Volume 20, Issue 2, December 1995, Pages 247-262
Irrigation water from a southeastern Colorado county has been sold to distant municipalities. The county's junior water right delivered limited and uncertain water supplies which were used on relatively poor soils. The ability of water markets to allocate water to the highest-valued use was addressed by assessing the direct foregone benefits of the transfer using deterministic and discrete stochastic sequential (DSSP) programming models. Crop mix predicted by the DSSP followed observed regional patterns. The DSSP was thus used to derive regional water demand from which foregone value was estimated. Direct regional foregone agricultural benefits were relatively low-due to uncertain water supplies and unproductive soils-indicating the market selected a low-valued supply for transfer.