Influence of Climate Variability on the Market Price of Water in the Gila-San Francisco Basin
Jennifer L. Pullen and
Bonnie G. Colby
Journal of Agricultural and Resource Economics, 2008, vol. 33, issue 3
Emerging water markets in the western United States have slowly developed as usage patterns have changed over time. This article develops an econometric model for the Gila-San Francisco Basin. Results indicate the market price of water has risen in response to drought and market conditions. Analysis shows a statistically significant relationship between the price and quantity of water transferred, year the transaction occurred, location where the transaction occurred, new use of the water right, and whether the transaction occurred during a drought year. Using the Standard Precipitation Index, we find negotiated prices are higher during dry years.
Keywords: Drought; econometrics; hedonic; market price; Palmer Hydrological Drought Index; Standard Precipitation Index; water; western United States; Resource /Energy Economics and Policy (search for similar items in EconPapers)
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Persistent link: http://EconPapers.repec.org/RePEc:ags:jlaare:46568
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