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Short and Long term Effects of Water Markets

Rim Lahmandi-Ayed () and Mohamed Matoussi
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Mohamed Matoussi: Université de Tunis [Tunis]

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Abstract: We aim at checking from a theoretical viewpoint the claims made about water markets in the literature. We prove that water markets improve farmers' profits and production efficiency but do not necessarily improve total production and do not always encourage private investments. Taking into account the transaction cost of water markets and the social cost due to the inactivity of some farmers that may result from water markets, we prove that water markets do not always improve total surplus. JEL Classification: Q25, C72, O33.

Keywords: Water markets; Water scarcity; Production efficiency; Total production; Private investment; Social costs; Transaction costs (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr and nep-gth
Date: 2018-08-28
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