Estimating Dairy Farms’ Demand for Water

Alexey Kravchenko

No 136048, 2012 Conference, August 31, 2012, Nelson, New Zealand from New Zealand Agricultural and Resource Economics Society

Abstract: Resource Management's Act current “first come first served” method of distributing water rights is fast becoming inadequate to handle this increasingly over-allocated factor of production. Water markets or tariffs are one way to achieve allocative efficiency. To establish such markets or tariffs, it is imperative to estimate users’ responses to having, for the first time, to pay for this currently largely unpriced input. This study seeks to provide a viable “starting point” estimate of the response curve to water price tariffs of dairy farmers – NZ’s largest fresh water consumers – using the MPI dairy monitoring dataset. This paper suggests that under the assumptions of inelastic input substitutability, the farms’ supply curves can provide an approximation of the farms’ responses to at-site (irrigation cost inclusive) changes of water costs.

Keywords: Agribusiness; Agricultural and Food Policy; Crop Production/Industries; Demand and Price Analysis; Environmental Economics and Policy; Farm Management; Land Economics/Use; Production Economics (search for similar items in EconPapers)
Pages: 17
Date: 2012-08
New Economics Papers: this item is included in nep-agr, nep-eff and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/136048/files/K ... 02012%20complete.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:nzar12:136048

DOI: 10.22004/ag.econ.136048

Access Statistics for this paper

More papers in 2012 Conference, August 31, 2012, Nelson, New Zealand from New Zealand Agricultural and Resource Economics Society Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().