Analysis of the impact of a volumetric tariff for irrigation in Northern Italy through the “Inverse DiD†approach

Andrea Pronti and Julio Berbel
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Julio Berbel: Department of Agricultural Economics, Universidad de Córdoba, Spain

No 1320, SEEDS Working Papers from SEEDS, Sustainability Environmental Economics and Dynamics Studies

Abstract: The impact of water-pricing policy in irrigated agriculture in Emilia Romagna (Italy) is evaluated through the analysis of farmers’ water use whereby a flat-rate tariff (2013-2015) is replaced by a two-tier scheme composed of a flat rate plus a volumetric tariff (2016-2018). The policy assessment is performed by an innovative ‘Inverse-DiD’ approach based on the reverse application of the Difference in Differences method. The results indicate that farmers reacted to volumetric pricing by reducing water use per hectare to 56%. The high responsiveness may be explained by the combined impact of volumetric metering itself and the small price increase from the previous flat rate (zero marginal price) to a moderate volumetric tariff (from 0.025 to 0.044).

Keywords: Difference in Differences; Water pricing; Policy assessment; Irrigation Water Management; Emilia-Romagna (search for similar items in EconPapers)
JEL-codes: Q12 Q25 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2020-07, Revised 2020-07
New Economics Papers: this item is included in nep-agr
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http://www.sustainability-seeds.org/papers/RePec/srt/wpaper/1320.pdf First version, 2020 (application/pdf)
http://www.sustainability-seeds.org/papers/RePec/srt/wpaper/1320.pdf Revised version, 2020 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:srt:wpaper:1320

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