Using Water Allocation in Israel as a Proxy for Imputing the Value of Agricultural Amenities

Yerushalmi, Erez (2018) Using Water Allocation in Israel as a Proxy for Imputing the Value of Agricultural Amenities. Ecological Economics. ISSN 09218009 (ISSN) (In Press)

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Abstract

This paper uses the water allocation economy in Israel as a proxy for imputing the value of agricultural amenities. A general equilibrium model is developed, and incorporates agricultural amenities as byproducts of agricultural production, water trade channels, and multiple water types. The premise is that until a decade ago, water policy in Israel was interlinked with agricultural land-use policy. Integrating a Monte-Carlo analysis, the model searches for a baseline minimum value of agricultural amenity that makes household, in the counterfactual scenario, indifferent between the administrative and market mechanisms. The minimum imputed value is around 109% agricultural output. The intuition is that the gains in economic welfare, from improved water use efficiency, are offset by the losses in social welfare due to a reduction in available agricultural amenities.

Item Type: Article
Uncontrolled Keywords: agricultural amenities; administrative water allocation; water market; general equilibrium; Israel
Subjects: L100 Economics
Divisions: Faculty of Business, Law and Social Sciences > Birmingham City Business School > Dept. Accountancy and Finance
Depositing User: Erez Yerushalmi
Date Deposited: 07 Mar 2018 15:49
Last Modified: 08 Mar 2018 11:20
URI: http://www.open-access.bcu.ac.uk/id/eprint/5677

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