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Salanié, François
and Zaporozhets, Vera
(2021)
Water Allocation, Crop Choice, and Priority Services.
TSE Working Paper, n. 21-1235, Toulouse
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Abstract
We analyze the problem of allocating irrigation water among het- erogenous farmers when water supply is stochastic. If farmers are risk-neutral, a spot market for water is e¢ cient; while the oft-used uniform rationing system is ine¢ cient, both ex-ante and ex-post. In- deed, we show that it leads farmers to overexpose to risk, thus making shortages more severe and more frequent in case of drought. We pro- pose instead a regulation by priority classes extending Wilson (1989), and we derive an e¢ ciency result. We characterize the set of farmers that would win or loose from such a reform. We also argue that a system of priority classes may be preferred to a spot market system, because scarcity is easier to manage ex-ante than ex-post, and because this system facilitates the supply of insurance to risk-averse agents.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | July 2021 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | Water, Irrigation, Priority Classes, Rationing |
| JEL Classification: | Q15 - Land Ownership and Tenure; Land Reform; Land Use; Irrigation Q25 - Water |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 28 Jul 2021 07:16 |
| Last Modified: | 03 Jan 2022 14:06 |
| OAI Identifier: | oai:tse-fr.eu:125835 |
| URI: | https://publications.ut-capitole.fr/id/eprint/43709 |
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