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| Hansen, Kristiana; Kaplan, Jonathan D.; Kroll, Stephan. |
| Risk and reliability dominate water supply discussions in the arid western United States in light of increasing demand and finite, weather-dependant supply. Thus water agencies increasingly turn to contractual mechanisms such as dry-year options to manage supply risk in advance of need. Although a few water agencies across the West have implemented dry-year options, sufficient data for conventional econometric analysis do not yet exist. We thus utilize experimental economics to analyze the effect of annual dry-year options on water markets. We consider how market structure (competitive versus monopsony power) and option contract availability affect water price and allocation within a market and find that realized gains from trade are on average higher when... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Resource /Energy Economics and Policy; D23; L22; Q25. |
| Ano: 2008 |
URL: http://purl.umn.edu/108722 |
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| Hansen, Kristiana; Frahan, Bruno Henry de. |
| This paper evaluates the production and income effects from the adoption of one popular agro-environmental measure, which concerns buffer strips along field edges, on a representative sample of crop farms in Belgium taken from the Farm Accountancy Data Network database. We represent the economic behaviour of each crop farm with a profit-maximisation programming model that embeds an estimated ex-ante flexible cost function. We calibrate the simulation model using the Positive Mathematical Programming approach. Accounting for farm and regional heterogeneity, simulation results show how crop farms may respond differently to incentives for the agroenvironmental measure. Results demonstrate that economic incentives can be an effective mechanism for encouraging... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Agricultural and Food Policy; Environmental Economics and Policy. |
| Ano: 2011 |
URL: http://purl.umn.edu/114577 |
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| Hansen, Kristiana; Howitt, Richard E.; Williams, Jeffrey C.. |
| In California, the tremendous spatial and temporal variation in precipitation suggests that flexible contractual arrangements, such as option contracts, would increase allocative efficiency of water over time and space. Under such arrangements, a water agency pays an option premium for the right to purchase water at some point in the future, if water conditions turn out to be dry. The premium represents the value of the flexibility gained by the buyer from postponing its decision whether to purchase water. In California, the seller of existing option arrangements is often an agricultural producer who can fallow land, in the event that a water option is exercised. In this simulation-optimization approach, we seek to determine the value of transferring... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Risk and Uncertainty. |
| Ano: 2006 |
URL: http://purl.umn.edu/21218 |
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| Hansen, Kristiana; Kaplan, Jonathan D.; Kroll, Stephan; Howitt, Richard E.. |
| Risk and reliability dominate water supply discussions in the arid western United States. In the past, water managers built additional storage to mitigate supply risk. The optimal, least expensive storage sites have now been taken, and there are strong, environmental objections to new facilities. Reliability of existing supplies is further diminished due to concerns about endangered species and global climate change. Thus water agencies increasingly turn to contractual mechanisms such as dry-year options to manage supply risk in advance of need. However, although a few water agencies across the West have implemented dry-year options, sufficient data for conventional econometric analysis do not yet exist. We thus utilize experimental economics to... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Resource /Energy Economics and Policy. |
| Ano: 2007 |
URL: http://purl.umn.edu/10002 |
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