Selected Empirical Analyses
New Horizons in Environmental Economics series
Edited by Phoebe Koundouri
Chapter 12: Is irrigation water demand really convex?
Christophe Bontemps, Stéphane Couture and Pascal Favard 1. INTRODUCTION In many countries of the world, water scarcity has signiﬁcant environmental, health and other domestic consequences. Competition between users is increasing and the current water allocation mechanisms need to reﬂect this new reality (Tsur and Dinar, 1997). Water underpricing has played a major role in the development of irrigation and has favoured wasteful use of water and ineﬃcient farming choices. ‘Getting prices right’ is seen as particularly important to solve ineﬃcient water use (Johansson et al., 2002) and the related problems such as scarcity, conﬂicts between users, equity, waste, which are mainly due, or at least attributed, to water use for irrigation. The theory of eﬃcient water pricing is well-deﬁned (Tsur et al., 2002; Johansson et al., 2002), and its application would help farmers to use water more eﬃciently. One of its crucial elements is the derived demand for irrigation water. Tsur et al., suggest two main approaches to estimate this derived demand: an econometric and a mathematical programming approach. Only a few works focus on econometric estimation of irrigation water demand. In France, to our knowledge, only one econometric estimation of irrigation water demand has yet been published (Michalland, 1995). The main reason is probably that appropriate data required for econometric estimation are diﬃcult to collect. Another reason is that, when the data exist, few ﬂuctuations in the prices are observed and sometimes water price is null for many users....