Water Pricing and Quotas: A Quantitative Analysis from a Private and Social Perspective

Ángela Valle-García (), Carlos Gutiérrez-Martín and Nazaret M. Montilla-López
Additional contact information
Ángela Valle-García: Universidad de Córdoba
Carlos Gutiérrez-Martín: Universidad de Córdoba
Nazaret M. Montilla-López: Universidad de Córdoba

Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), 2024, vol. 38, issue 11, No 16, 4287-4306

Abstract: Abstract The current situation of structural water scarcity due to the rise in demand, the reduction in supply as a consequence of climate change, increasingly frequent drought periods, and overall quantitative pressure on water resources creates a need for economic instruments to reduce the amount of water used, especially in the agricultural sector. Thus, water pricing and allocation quotas (proportional reduction of allocations) may be suitable tools to reduce demand or allocate scarce water resources. For a comparative analysis of the performance of these two measures, a Positive Mathematical Programming model has been developed, using the Guadalquivir River Basin as a case study. Additionally, the analysis takes into account the revenue generated from water pricing and the marginal cost of public funds. The results indicate that, from the farmer’s perspective, quotas result in smaller losses than water pricing. However, when considering water pricing along with the revenue generated from this measure, this mechanism would be more beneficial for society as a whole, since the taxes collected could be used for other purposes, albeit with efficiency losses measured by the marginal cost of public funds and the excess burden of taxation.

Keywords: Water pricing; Water quotas; Spain; Positive Mathematical Programming; Marginal cost of public funds (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11269-024-03865-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:waterr:v:38:y:2024:i:11:d:10.1007_s11269-024-03865-1

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/11269

DOI: 10.1007/s11269-024-03865-1

Access Statistics for this article

Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA) is currently edited by G. Tsakiris

More articles in Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA) from Springer, European Water Resources Association (EWRA)
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().