Agent-Based hydro-economic modelling for analysis of groundwater-based irrigation Water Market mechanisms
Hosein Alizadeh and
Agricultural Water Management, 2020, vol. 234, issue C
Agricultural water markets play a crucial role in arid and semi-arid regions by reallocating water and transferring it from low-value uses to high-value uses. Several markets for surface water and groundwater are functioning all over the world to increase economic well-being of farmers and meet environmental flow requirements. However, there is not a consensus on precisely which market mechanism may be more environmentally and economically beneficial. This study presents an agent-based groundwater market model to analyze the economic and hydrologic impacts of three market mechanisms, designed based on the cap-and-trade scheme, that differ in the price discovery process, two of which are uniform price double-auction and the third is a discriminatory price double-auction. This study also analyzes the hydrologic and economic impacts of water buyback programs. Modeling results, applied to Rafsanjan Plain, an arid region in Iran, show that the discriminatory price double-auction is the most hydrologically and economically advantageous mechanism since it reduces the annual water level drawdown by 38 % and brings about more profits for farmers in comparison with other market mechanisms. Furthermore, the buyback program effectively reduces the inequality of wealth distribution (Gini Index) and increases farmers' net benefit while reducing their surplus.
Keywords: Tradeable groundwater permits; Agent-Based modeling; Uniform price double-auction; Discriminatory price double-auction; Water buyback program (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:agiwat:v:234:y:2020:i:c:s0378377419319316
Access Statistics for this article
Agricultural Water Management is currently edited by B.E. Clothier, W. Dierickx, J. Oster and D. Wichelns
More articles in Agricultural Water Management from Elsevier
Bibliographic data for series maintained by Catherine Liu ().