A reevaluation of price elasticities for irrigation water
- 1 August 1980
- journal article
- Published by American Geophysical Union (AGU) in Water Resources Research
- Vol. 16 (4) , 623-628
- https://doi.org/10.1029/wr016i004p00623
Abstract
The effectiveness of pricing systems in the allocation of irrigation water is linked with the price elasticity of demand of farmers for water. Using microeconomic theory, it is shown that omission of the elasticity of demand for the crop produced leads to an inelastic bias in the demand for irrigated water. Linear programing approaches omit the product elasticity of demand and are consequently biased, whereas quadratic programing approaches to estimating derived demands for irrigation water include product demand functions. The difference between the resulting estimates are empirically demonstrated for regional derived demand functions estimated from a model of California's agricultural industry.Keywords
This publication has 4 references indexed in Scilit:
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- Derived Demand for Irrigation Water: The California AqueductJournal of Agricultural and Applied Economics, 1973
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