The Value of Heterogeneous Property Rights and the Costs of Water Volatility

Daniel A. Brent

No 45-14, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: The system of prior appropriation in the Western Unites States prioritizes property rights for water based on the establishment of beneficial use, creating a hierarchy where rights initiated first are more secure. I estimate the demand for security in water rights through their capitalization in agricultural property markets using spatially explicit water rights data in the Yakima River Basin, a major watershed in Washington State. The Yakima River watershed, like many Western watersheds, satisfies all water claims during an average year so the benefits of secure water rights stem from protection against water curtailment during drought years. Thus the relative value of secure property rights is a function of water supply volatility because the costs of droughts are predominantly born by those with weak rights. Bayesian model averaging and boundary discontinuity specifications of the hedonic price model indicate that the premium for more secure water rights is not statistically different from zero.

Keywords: water rights; hedonic valuation; water volatility; agricultural economics, Bayesian model averaging, boundary discontinuity (search for similar items in EconPapers)
JEL-codes: Q21 Q25 Q54 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2014-09
New Economics Papers: this item is included in nep-agr and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.buseco.monash.edu.au/eco/research/papers/2014/4514valuebrent.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden (http://www.buseco.monash.edu.au/eco/research/papers/2014/4514valuebrent.pdf [301 Moved Permanently]--> https://www.monash.edu/business/ [301 Moved Permanently]--> https://www.monash.edu/business)

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:mos:moswps:2014-45

Ordering information: This working paper can be ordered from
https://www.monash.e ... esearch/publications
ratbek.dzhumashev@monash.edu

Access Statistics for this paper

More papers in Monash Economics Working Papers from Monash University, Department of Economics Department of Economics, Monash University, Victoria 3800, Australia. Contact information at EDIRC.
Bibliographic data for series maintained by Simon Angus (simon.angus@monash.edu).