Analysis of short‐run domestic water supply transfers under uncertainty

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Abstract
From the perspective of water supply managers, supply reliability can be more important than economic benefit. This study uses four alternative models of water supply allocation to examine issues of reliability and welfare maximization arising from short‐run inter‐city water transfers. The results of this work show that the economic gain from water transfers may be relatively small. However, water transfers can significantly improve system reliability, thus providing strong incentives for transfer arrangements among water authorities. We apply the models in a case study on the island of Cyprus.