Analysis of the Adoption of Irrigation Technologies Under Uncertain Water Availability

Maria Jesus Escribano and Javier Calatrava-Leyva

No 24672, 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark from European Association of Agricultural Economists

Abstract: This paper analyses the adoption process of water-conserving irrigation technologies by a risk averse farmer in a context of uncertain water availability. Firstly, it is analytically shown that the increase in water efficiency that the new technology allows results in a decrease in the cost of the effective irrigation water applied, as well as in an increase in both effective water applied and crop production. It is also concluded that the optimal amount of irrigation water applied depends on individual risk preferences of the producer, on the variance and asymmetry of the cost of water applied, and on the elasticity of the marginal productivity of the effective water applied. Lastly, it is theoretically shown that an increase in the level of uncertainty regarding water availability incentives the adoption of modern irrigation technologies only if this allows for a reduction in the amount of water applied.

Keywords: Research and Development/Tech Change/Emerging Technologies; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 10
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae05:24672

DOI: 10.22004/ag.econ.24672

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