Agricultural Water Allocation under Uncertainty: Redistribution of Water Shortage Risk

Man Li, Wenchao Xu and Tingju Zhu ()

American Journal of Agricultural Economics, 2019, vol. 101, issue 1, 134-153

Abstract: This article develops an economic model to analyze how the risk of water shortages affects farmers’ land irrigation decision and how the priority-based water sharing arrangement redistributes such a risk among farms with different water rights priorities. The analysis brings together an array of comprehensive data files on irrigation rights, water supplies, and agricultural land use from eastern Idaho. Results indicate that a more left-skewed distribution of streamflow significantly discourages land irrigation among farmers except the most senior rights holders. The priority-based water sharing arrangement redistributes the macroscale risk of water shortages and thus exposes farmers of different water rights priorities to heterogeneous levels of risk: senior water rights holders are affected the least and such a risk is instead passed mostly on to junior water rights holders. The role of water rights in risk redistribution is more significant when the probability distribution of water shortage risk is asymmetric rather than symmetric. The historical development pattern of water rights influences how the priority of water rights takes effect on land irrigation decision.

Keywords: Water shortage risks; risk redistribution; irrigated agriculture; water rights (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://hdl.handle.net/10.1093/ajae/aay058 (application/pdf)
Access to full text is restricted to subscribers.

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:oup:ajagec:v:101:y:2019:i:1:p:134-153.

Access Statistics for this article

American Journal of Agricultural Economics is currently edited by Madhu Khanna, Brian E. Roe, James Vercammen and JunJie Wu

More articles in American Journal of Agricultural Economics from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().