Valuation of Irrigation Water by the Hedonic Price Method: A Case Study in Chalkidiki, Greece

Latinopoulos, P.; Tziakas, V.; Mallios, Zisis

doi:10.1023/b:wafo.0000044803.01747.bd

Cited by 26 publications

(27 citation statements)

References 8 publications

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“…Note that wp = wp(lr) means that farmers are assumed to be willing to renounce up to 100% of their increase in net income due to the irrigation project during the loan period, whereas wp < wp(lr) is consistent with the observation that the estimated annual value of water per hectare obtained by applying the contingent-valuation method (i.e., based on stated preferences; [54]) turned out to be about half of the estimate obtained using the hedonic price method (i.e., based on revealed preferences; [55]) in a nearby area.…”

Section: The Financial Analysissupporting

confidence: 71%

Combining Econometric, Cost–Benefit, and Financial Methodologies in a Framework to Increase Diffusion and to Predict the Feasibility and Sustainability of Irrigation Schemes: A Case Study in Kurdistan, Iraq

Zagonari

2017

Water

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This paper applies ex ante econometric, cost-benefit, and financial methodologies to increase participation in an irrigation project and predict its financial feasibility and social sustainability in Shahrazoor, Kurdistan, Iraq. I investigated the socio-economic, psycho-cultural, and financial factors that determine participation. The socio-economic part of the econometric analysis showed that the project was appreciated more by poorer and economically weaker farmers who rely on agriculture than by those who rely on livestock activities. The psycho-cultural part of the econometric analysis emphasized that the project was appreciated more by literate farmers who adopt a maximization (rather than habit) approach. The cost-benefit analysis applied to the irrigation project was tailored to poorer and weaker farmers (i.e., costs of the irrigation scheme and benefits from new cultivation patterns were defined with reference to small farms) by including indirect benefits from both irrigation (e.g., flood control) and hydropower (e.g., eliminated GHG emissions), and determined a 7.1% mean internal rate of return; this was affected more strongly by uncertainty in crop prices than by uncertainty in indirect benefits. The financial analysis highlighted values for water prices, financial returns, and loan rates that met government and farmer budgets. A single framework summarized the main relevant social, economic, and financial conditions, and, by including insights from sensitivity analyses, determined the feasibility and sustainability of the irrigation project. Provided that the water price charged to farmers is between 0.32 and 0.57 USD/m 3 , and the loan interest rate paid by farmers is smaller than 3.0%, the irrigation project in Shahrazoor is financially feasible for 13.6% of all reliable economic solutions and socially sustainable for 35.8% of the solutions.

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Section: The Financial Analysissupporting

confidence: 71%

Combining Econometric, Cost–Benefit, and Financial Methodologies in a Framework to Increase Diffusion and to Predict the Feasibility and Sustainability of Irrigation Schemes: A Case Study in Kurdistan, Iraq

Zagonari

2017

Water

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“…In many locations, irrigation water is effectively regarded as a non-market goods and does not carry a market price. Thus, non-market valuation methods can be employed (Young, 2005;Latinopoulos et al, 2004;Latinopoulos, 2005). The Contingent Valuation Method (CVM) is a flexible non-market valuation method widely used for more than three decades (Mitchell and Carson, 1989).…”

Section: Introductionmentioning

confidence: 99%

The willingness to pay for irrigation water: a case study in northwest China

Tang¹,

Nan

Liu³

2013

Global NEST Journal

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To inform the further development of water pricing in Shiyang River basin, a typical arid region in northwest China with agriculture as the major consumer of water, this research conducted a contingent valuation study on farmer's willingness to pay (WTP) for irrigation water. The results show that the current irrigation water price is to low to achieve sustainable use of water. The main reason of low price is not the farmer's inability to pay, but their unwillingness to pay. Furthermore, a vicious cycle of less willingness to pay and poor services exist in irrigation water management. The probable solutions include the increase of public investment in water infrastructure and determine appropriate price between surface water and groundwater. More important, enhance the communication and cooperation between water use and water agency, the combination of price mechanism and other instruments, such as positive incentives and the establishment of an independent water user organization (WUO), are useful.

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“…They can be grouped according to whether they rely on observed market behaviour and data to infer economic value (indirect techniques), or alternatively use survey methods to obtain valuation information directly from water users (direct techniques) (Agudelo, 2001). Examples of indirect techniques used for valuing irrigation water can be found in following studies: Kulshreshtha and Tewari (1991) used derived demand functions, Faux and Perry (1999) and later Latinopoulos et al (2004) used an hedonic pricing approach and several authors, among whom Lange (2007), Agudelo and Hoekstra (2001) and McGregor et al (2000), used residual imputation approaches to estimate water values. Other indirect techniques such as the averting behaviour method, the travel cost method, the income multiplier approach and the replacement cost/cost savings methods are less relevant for irrigation water valuing.…”

Section: Small-scale Irrigation In South Africamentioning

confidence: 99%

“…The current water scarcity and the limited options for augmenting supply to meet the needs of the growing economy and population, furthermore strongly suggest that water resource management should focus on more efficient usage of existing resources (Ashton and Haasbroek, 2002;Perret, 2002;DWAF, 2004). Decisionmaking to achieve more efficient water use requires reliable estimates of the economic value of water (Ward and Michelsen, 2002;Latinopoulos et al, 2004;Hellegers, 2005;Hellegers and Perry, 2006;Hussain et al, 2007). Knowledge of the economic value of water is necessary when making investment decisions in water resources development, drawing policies for sustainable water use and water allocations or when the socio-economic impacts of water management decisions must be determined (Hussain et al, 2007).…”

Section: Introductionmentioning

confidence: 99%

Variability in smallholders' irrigation water values: Study in North‐West Province, South Africa

Speelman

Frija

Perret

et al. 2011

Irrigation and Drainage

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Capturing the economic value of water use is an integral part in the design of economic incentives and institutional arrangements that can ensure sustainable, efficient and equitable allocation of water. Irrigation water values of small-scale irrigators are however seldom studied and too little attention is paid to the determinants of the variability of the water values. In South Africa issues like the call for more efficient water allocation resulting from growing water scarcity, the approaching introduction of water charges for smallholders and the crucial role in rural development attributed to small-scale schemes, render this knowledge even more important. This study therefore first assesses irrigation water values at small-scale irrigation schemes in South Africa using the residual imputation method. Results reveal that, without input subsidies smallholders have difficulties to generate a profit from certain irrigated crops. This raises doubts about the capacity of smallholders to pay for water. The average economic value of irrigation water in this study is 0.188US$/m³. The water values are however shown to be highly variable. The General Linear Model shows that this variability can be mainly attributed to the crop choice and to the irrigation scheme design and institutional setting.

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Valuation of Irrigation Water by the Hedonic Price Method: A Case Study in Chalkidiki, Greece

Cited by 26 publications

References 8 publications

Combining Econometric, Cost–Benefit, and Financial Methodologies in a Framework to Increase Diffusion and to Predict the Feasibility and Sustainability of Irrigation Schemes: A Case Study in Kurdistan, Iraq

Combining Econometric, Cost–Benefit, and Financial Methodologies in a Framework to Increase Diffusion and to Predict the Feasibility and Sustainability of Irrigation Schemes: A Case Study in Kurdistan, Iraq

The willingness to pay for irrigation water: a case study in northwest China

Variability in smallholders' irrigation water values: Study in North‐West Province, South Africa

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