Yacov Tsur

The buffer value of groundwater with stochastic surface water supplies

When utilized with a stochastic source of surface water for irrigation, groundwater may serve to mitigate fluctuations in the supply of water. The benefit corresponding to this service is the buffer value of groundwater. We show that the buffer value is positive. Numerical studies reveal that its magnitude can be significant. The paper also offers a characterization of groundwater extraction in such a setting.

Accounting for global warming risks: Resource management under event uncertainty

Abstract Optimal management of atmospheric pollution is discussed with a special emphasis on the uncertainty concerning the occurrence of undesirable events associated with the greenhouse effect. The uncertainty considered here stems from our ignorance of the exact pollution level required to trigger the event rather than from the genuinely stochastic nature of the processes involved. Taking atmospheric pollution level as the state variable, it is found that uncertainty implies the existence of an equilibrium interval, within which the emission rate of the greenhouse gases should be kept equal to the natural removal rate of these gases. Processes initiated outside the equilibrium interval must converge monotonically to its nearest endpoint. The determination of the interval requires no knowledge of the optimal policy. In contrast, ignoring event occurrence risk implies a single equilibrium level, attracting the optimal process from any initial level.

Pricing Irrigation Water : Principles and Cases from Developing Countries

Contributors Preface 1. The Need for Effective Pricing 2. A Literature Survey 3. Economic Principles of Irrigation Water Demand and Supply 4. A Microeconomic Analysis of Pricing in Morocco, China, Mexico, South Africa, and Turkey 5. Interaction Between Economywide Policies and Irrigated Agriculture in Morocco 6. Policy Implications 7. Pricing Irrigation Water in Morocco 8. Pricing Irrigation Water in China 9. Pricing Irrigation Water in Mexico 10. Pricing Irrigation Water in South Africa 11. Pricing Irrigation Water in Turkey Glossary References Index

Efficiency and equity considerations in pricing and allocating irrigation water

Economic efficiency has to do with how much wealth a given resource base can generate. Equity has to do with how that wealth is to be distributed in society. Economic efficiency gets far more attention, in part because equity considerations involve value judgements that vary from person to person. The authors examine both the efficiency and the equity of different methods of pricing irrigation water. After describing water pricing practices in a number of countries, they evaluate their efficiency and equity. In general they find that water use is most efficient when pricing affects the demand for water. The volumetric, output, input, tiered, and two-part tariff schemes all satisfy this condition and can be efficient although whether efficiency is short-run or long-run, first- or second-best, varies. Pricing schemes that do not directly influence water input -- per-unit areas fees for example -- lead to inefficient allocation. But they are usually easier to implement and administer and require less information. The extent to which water pricing methods can effect income redistribution is limited, the authors conclude. Disparities in farm income are mainly the result of factors such as farm size and location and soil quality, but not water (or other input) prices. Pricing schemes that do not involve quantity quotas cannot be used in policies aimed at affecting income inequality. The results somewhat support the view that water prices should not be used to effect income redistribution because water prices are a poor vehicle for reducing income inequality. But pricing schemes that involve water quota rules can reduce income inequality. The authors demonstrate this with a two-rate tiered pricing scheme combined with equal quotas of the cheaper water.

Optimal transition to backstop substitutes for nonrenewable resources

Abstract We analyze the optimal transition from a primary, nonrenewable resource to a backstop substitute for a class of problems characterized by the property that the backstop cost decreases continuously as learning from R&D efforts accumulates to increase the knowledge base. The transition policy consists of the R&D process and of the time profiles of the primary and backstop resource supply rates. We find that the optimal R&D process follows a most rapid approach path (MRAP): the knowledge process associated with R&D should approach some (endogenously derived) target process as rapidly as possible and proceed along it thereafter. Thus, if the initial knowledge level is sufficiently low and the cost structure justifies R&D activities, the R&D efforts should be initiated without delay at the highest affordable rate and slow down later on. This pattern contrasts previous findings that typically recommend a single-humped R&D process with a possible initial delay.

Explaining Price Policy Bias in Agriculture: The Calculus of Support-Maximizing Politicians

A model is developed to explain observed patterns of policy intervention in agriculture. We analyze the interaction between political support-seeking politicians and support-supplying citizens. Society consists of a rural and urban group. We determine the effects on transfers of relative group size, disparities in income endowments between groups, and the deadweight loss of redistribution. The framework advanced is an alternative to that of the interest group model and is used to explain, for example, why the export sectors in developing countries are taxed more and why the United Kingdom is less adamant for higher price supports than Germany.

Decentralization and coordination of water resource management

1. Introduction and Overview D.D. Parker, Y. Tsur. Part I: Regional Water Constraints: Middle East, California, Florida, and Australia. 2. The Israel Water Economy: An Overview D. Yaron. 3. The Jordan River Basin: Beyond National Concerns J. Kindler. 4. Water Resources in Turkey: Availability, Use, and Management E.H. Cakmak. 5. Californias Water Resources and Institutions D.D. Parker. 6. Decentralized Water Allocation in Florida W.G. Boggess. 7. Australias Water Situation: Resource Allocation and Management in a Maturing System J.J. Pigram. Part II: Economic Modeling of Decentralized Water Management Policies. A: Political Economy of Water Allocation. 8. The Political Economy of Domestic Water Allocation: The Cases of Israel and Jordan R.E. Just, et al. 9. Transboundary Water Agreements and Development Assistance G.B. Frisvold, M.F. Caswell. 10. Informational Imperfections in Water Resource Systems and the Political Economy of Water Supply and Pricing in Israel P. Zusman. 11. The Strategic Interdependence of a Shared Water Aquifer: A General Equilibrium Analysis T. Roe, Xinshen Diao. B: Water Institutions: Transition to Markets and Other Decentralized Allocation Mechanisms. 12. Designing Institutions for Water Management J. Roumasset. 13. Employing Market Mechanisms to Encourage Efficient Use of Water in the Middle East N. Becker, et al. 14. Efficient Management of Water in Agriculture D. Zilberman, et al. 15. Deriving Short-Run, Multistage Demand Curves and Simulating Market Prices for Reservoir Water Under Weather Uncertainty N. Dudley, B. Scott. 16. Water Institutions, Incentives, and Markets K.W. Easter, G. Feder. C: Incorporating Uncertainty in Resource Management Models. 17. On Event Uncertainty and Renewable Resource Management Y. Tsur, A. Zemel. 18. Quantifying Tradeoffs Between In-Stream and Off-Stream Uses Under Weather Uncertainty N. Dudley, B. Scott. 19. An Ex Ante Approach to Modeling Investment in New Technology A.P. Thurow, et al. 20. The Economics of Conjunctive Ground and Surface Water Irrigation Systems: Basic Principles and Empirical Evidence from Southern California Y. Tsur. Part III: Case Studies. 21. Peace and Prospects for International Water Projects in the Jordan-Yarmouk River Basin R.E. Just, et al. 22. Modeling the Impacts of Reducing Agricultural Water Supplies: Lessons from Californias Bay/Delta Problem D. Sunding, et al. 23. Water and Conflict in the Twenty-First Century: The Middle East and California P.H. Gleick. 24. Decentralized Mechanisms and Institutions for Managing Water Resources: Reflections on Experiences from Australia W. Musgrave. Index.

Irrigation water pricing: policy implications based on international comparison

This paper is concerned with the regulation of irrigation water via pricing. The main concepts underlying efficient water use are first discussed and then applied in actual practice to demonstrate empirically how readily available data can be used to implement pricing schemes that achieve efficient allocation of water. The policy discussion includes also equity considerations. The empirical findings, however, reveal that water prices have a small effect on income distribution within the farming sector, thereby supporting the view that water pricing should be designed primarily to increase the efficiency of water use, leaving income distribution considerations to other policy tools.

Managing Drainage Problems in a Conjunctive Ground and Surface Water System

This chapter develops a framework for the management of an irrigation and drainage system where irrigation is derived both from surface and ground-water sources. Basic principals underlying the management of a conjunctive ground and surface water system are introduced and used to derive optimal rules for managing such a system. Common property characteristics of this system and the additional drainage problem are also included in the analysis that evaluates policies aimed at enforcing irigation/drainage rules and their effects on the environment. The relevancy of the approach to the situation in the San Joaquin Valley is discussed.

The infinite horizon dynamic optimization problem revisited: A simple method to determine equilibrium states

Abstract This work addresses intertemporal decision problems in which the policy adopted at any given time affects the state of the system during later periods. The standard treatment of such problems employs dynamic optimization methods. When the planning period extends over an infinite time horizon, the identification of the optimal equilibrium states is of prime importance. In this work we introduce a method to reduce the identification task to the algebraic problem of solving for the roots of a simple function of the state variable, denoted the evolution function. An explicit expression for the evolution function is derived for a general setup that covers a large variety of economic and management models. When the evolution function possesses a unique feasible root, the steady state is readily identified and a characterization of the dynamic behavior is possible. The application of the proposed method is illustrated by considering several resource exploitation problems.