The Economic Productivity of Water in Agriculture based on Ordered Weighted Average Operators

Abstract

Water productivity is one of the main indicators used in agriculture. Price of water change from some regions where the price is free to other with a very high price. When water productivity is measured in Euros, to make comparable the results of the regions where the price is free, we need to obtain a correct measurement, which will require setting a market price for water in areas where no price has yet been set. Therefore, the aim of this paper is to propose new productivity indicators based on fuzzy logic, whereby experts’ opinions about the possible price of the use of water as well as the annual variability of agricultural prices can be added. Therefore, the fuzzy willingness to pay (FWTP) and fuzzy willingness to accept (FWTA) methodology will be applied to create an artificial water market. The use of fuzzy logic will allow the uncertainty inherent in the experts’ answers to be collected. Ordered Weighted Averaging (OWA) operators and their different extensions will allow different aggregations based on the sentiment or interests reflected by the experts. These same aggregators, applied to the prices of the products at origin, will make it possible to create new indicators of the economic productivity of water. Finally, through an empirical application for a pepper crop in south-eastern Spain we can visualize the importance of the different indicators and their influence on the final results.