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Econometrics Informing Natural Resources Management

Selected Empirical Analyses

Edited by Phoebe Koundouri

This fascinating book outlines the fundamental principles and difficulties that characterise the challenging task of using econometrics to inform natural resource management policies, and illustrates them through a number of case studies from all over the world. The book offers a comprehensive overview of the broader picture of the state-of-the-art in econometrics as applied to environmental and natural resource management.
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Chapter 12: Is irrigation water demand really convex?

Christophe Bontemps, Stéphane Couture and Pascal Favard


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....

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