An Illiquid Market in the Desert: Estimating the Cost of Water Trade Restrictions in Northern Chile

Eric Edwards, Oscar Cristi, Gonzalo Edwards and Gary Libecap

No 21869, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper estimates the cost of a policy to restrict water trades to mining firms in northern Chile to protect riparian ecosystems and indigenous agriculture. In response to the policy, mining firms have developed high-cost desalination and pumping facilities to secure adequate water supplies. We develop a methodology and estimate the cost of market transactions that fail to occur due to the policy. Lost trade surplus is estimated at $52 million per year. Without trade restrictions, around 86% of the remaining agricultural water in the region would be transferred to mining.

JEL-codes: N56 N76 Q25 Q28 Q51 Q56 (search for similar items in EconPapers)
Date: 2016-01
New Economics Papers: this item is included in nep-agr, nep-env and nep-res
Note: DAE EEE
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Published as Eric C. Edwards & Oscar Cristi & Gonzalo Edwards & Gary D. Libecap, 2018. "An illiquid market in the desert: estimating the cost of water trade restrictions in northern Chile," Environment and Development Economics, vol 23(06), pages 615-634.

Downloads: (external link)
http://www.nber.org/papers/w21869.pdf (application/pdf)

Related works:
Journal Article: An illiquid market in the desert: estimating the cost of water trade restrictions in northern Chile (2018)
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:nbr:nberwo:21869

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w21869

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().