On the Relative Efficiency of Alternative Methods for Pricing Irrigation Water and their Implementation
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The paper investigates efficiency performance of several irrigation water pricing methods, paying special attention to costs associated with implementing these
methods. The volumetric, output, input, tiered and two-part tariff methods
can achieve efficiency, though the type of efficiency (short or long run, first or
second best) vary from one method to the other. Implementing these methods,
however, entails expensive information collection and administrative activities. Per
area pricing, which can not influence water input directly, is inefficient but is easier
to implement and administer and require a modest amount of information. As the
numerical example illustrates, differences • in implementation costs can render
volumetric pricing inferior to per-area pricing.