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MECHANISMS FOR ADDRESSING THIRD PARTY IMPACTS RESULTING FROM VOLUNTARY WATER TRANSFERS

James Murphy, Ariel Dinar, Richard E. Howitt, Erin Mastrangelo, Stephen Rassenti and Vernon Smith ()

No 14511, Working Paper Series from University of Massachusetts, Amherst, Department of Resource Economics

Abstract: This paper uses laboratory experiments to test alternative water market institutions designed to protect third party interests. The institutions tested include taxing mechanisms that raise revenue to compensate affected third parties and a market in which third parties actively participate. The results indicate that there are some important trade-offs in selecting a policy option. Active third party participation in the market is likely to result in free riding that may erode some or all of the efficiency gains, and may introduce volatility into the market. Taxing transfers and compensating third parties offers a promising balance of efficiency, equity and market stability.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 38
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://ageconsearch.umn.edu/record/14511/files/wp030007.pdf (application/pdf)

Related works:
Chapter: Mechanisms for Addressing Third-Party Impacts Resulting From Voluntary Water Transfers (2006) Downloads
Working Paper: MECHANISMS FOR ADDRESSING THIRD-PARTY IMPACTS RESULTING FROM VOLUNTARY WATER TRANSFERS (2002) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ags:umamwp:14511

DOI: 10.22004/ag.econ.14511

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