REGULATING IRRIGATION VIA BLOCK-RATE PRICING: AN ECONOMETRIC ANALYSIS
| dc.creator | Bar-Shira, Ziv | |
| dc.creator | Finkelshtain, Israel | |
| dc.creator | Simhon, Avi | |
| dc.date | 2017-04-01T14:32:12Z | |
| dc.date.accessioned | 2026-07-09T03:12:43Z | |
| dc.description | In this paper, we adapt Burtless and Hausman's (1978) methodology in order to estimate farmer's demand for irrigation water under increasing block-rate tariffs and empirically assess its effect on aggregate demand and inter-farm allocation efficiency. This methodology overcomes the technical challenges raised by increasing block rate pricing and accounts for both observed and unobserved technological heterogeneity among farmers. Employing a micro panel data documenting irrigation levels and prices in 185 Israeli agricultural communities in the period 1992-1997 we estimate water demand elasticity at -0.3 in the short run (the effect of a price change on demand within a year of implementation) and -0.46 in the long run. We also find that, in accordance with common belief, switching from a single to a block price regime, yields a 7% reduction in average water use while maintaining the same average price. However, based on our simulations we estimate that the switch to block prices will result in a loss of approximately 1% of agricultural output due to inter-farm allocation inefficiencies. | |
| dc.identifier | doi:10.22004/ag.econ.14982 | |
| dc.identifier | https://ageconsearch.umn.edu/record/14982/files/dp050003.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/14982 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/528517 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/14982 | |
| dc.title | REGULATING IRRIGATION VIA BLOCK-RATE PRICING: AN ECONOMETRIC ANALYSIS | |
| dc.type | Text |