evaluating the influence of personal relationships on land sale prices a case study in oregon land transactions typically involve substantial personal interaction between buyer and seller despite this fact researchers have made little attempt to determine how personal relationships influence the terms of trade for a property in this study linn county oregon farm land sales from 1992 1997 were examined to better understand and quantify the influences of personal relationships transactions between relatives and neighbors involved special considerations with greater frequency than did those between strangers and acquaintances transactions between parent and child and between neighbors brought significantly less than sales between strangers transactions resulting from a realtor or advertisement sold at a significant premium

an endogenous growth model for the evolution of water rights systems this article presents a model to help explain the transition path from one water management system to another typically a commons framework to one of tradable permit based property rights furthermore drawing from transaction cost literature the model demonstrates how this takes place when externalities the strain on water resources become severe enough to warrant the increased transaction costs inherent with more complex water rights management frameworks

do buyers characteristics and personal relationships affect agricultural land prices the influence of buyer and personal relationship characteristics on agricultural land prices has received little attention in the literature recently perry and robison 2001 used a restricted nonlinear specification to model the influence of personal relationships on the implicit prices of land characteristics in this paper a more flexible alternative model is proposed an approach to general model specification and model selection is presented the results indicate that buyer characteristics and personal relationships exert nonuniform effects on the implicit prices of land characteristics our results support the hypothesis that social capital affects the terms of trade in the land market

hedonic estimation applied to a water rights market rights is concerned with the efficiency of water allocations where there are legal and institutional constraints on water rights trades economists have argued that such constraints prohibit water from moving to its socially highest valued uses and hence that the allocation of water under these restrictions is inefficient on the other hand if water rights associated with a certain parcel of farm real estate could be sold separately from the land in a perfectly competitive market the allocation of water would be efficient hirshleifer et al 1969 42 43 anderson 1983 1 the past attempts to examine and compare the efficiency of water rights markets have been qualitative one notable example is the study by brown et al 1982 which hypothesized that water rights markets are more efficient in regions where water is relatively scarce six basins were examined and as

reflections on some unsettled problems of irrigation it is instructive to read the article that katharine coman published in the first issue of the american economic review to gain insight into the problems of collective action related to irrigation in the american west one gains further understanding of the problems coman identifies by using a social ecological system ostrom 2007 2009 to organize the diverse variables identified by coman one gains a general lesson from this analysis that changing the formal governance structure of irrigation is not sufficient to ensure efficient investment in facilities or that farmers are able to acquire property and make a reasonable living building knowledge and trust are however essential for solving collective action problems jel b31 n51 q15 q25 katharine coman wrote a fascinating article in the first issue of the american economic review dealing with the challenge of organizing effective irrigation systems in the united states west of the one hundredth meridian in the late nineteenth

understanding the evolution and performance of water markets and allocation policy a transaction costs analysis framework abstract water markets and associated allocation policy reforms have struggled to achieve their intended goals in many water stressed rivers in part due to the institutional friction imposed by transition and transaction costs this paper elaborates a transaction costs analysis framework to examine the evolution and performance of water markets and allocation policy reforms this analysis rests on three pillars i a synthesis of three theoretical traditions of institutional analysis williamson north and ostrom often considered independently ii a framework to examine the types and interactions of transaction costs in market based water allocation over time and iii an illustrative analysis of three large river basins the colorado columbia and murray darling with varying levels of success in market based water policy reforms the resulting framework accounts for water s complexity as an economic good this framework and the case studies lead to the identification of several policy implications including the need for a multiphase sequencing of reform strategic investment in institutional transition costs and institutional choices that preserve future flexibility to adjust water rights and diversion limits to manage social and environmental externalities

federalism chinese style the political basis for economic success in china china s remarkable economic success rests on a foundation of political reform providing a considerable degree of credible commitment to markets this reform reflects a special type of institutionalized decentralization that the authors call federalism chinese style this form of decentralization has three consequences first it fosters competition not only in product markets but also among local governments for labor and foreign capital this competition in turn encourages local government experimentation and learning with new forms of enterprises regulation and economic relationships second it provides incentives for local governments to promote local economic prosperity finally it provides a significant amount of protection to local governments and their enterprises from political intrusion by the central government

local elites and popular support for economic reform in china and india this article analyzes why it is that china an authoritarian political system has managed to generate more popular support for the reform process than india a democracy the authors argue that when local politicians and bureaucrats are more supportive of the reform process there is likely to be greater popular support for economic reform local political elite may be more supportive of reform in an authoritarian than in a democratic system because the level of local elite support for the reform process is influenced by the incentives faced by local elite in china institutional reform changed the incentives faced by local elite whereas in india reforms have not been accompanied by institutional changes that would encourage local elite to support reform to the same extent as in china the argument is based on local elite and mass surveys conducted in china and india in 1990 and 1996 respectively a logit model controlling for a variety of alternative explanations provides evidence that local elite

some unsettled problems of irrigation 1911 a reprint of the lead article in the inaugural issue of the american economic review some unsettled problems of irrigation by katharine coman who examined the common property resource problem as applied to water in the western united states

an analysis of growth of u s farmland prices 1963 82 increases in expected inflation or real growth in net rental income to land have been proposed as alternative explanations of the dramatic real growth in u s farmland prices in the 1970s in this paper the effect of inflation is shown to be theoretically ambiguous an empirical analysis using u s and international farmland prices suggests that most of the real land price growth can be explained by real growth in net rental income to land increases in expected inflation have had a negative effect on real land prices but the effect of inflation has been comparatively small

the value of agricultural water rights in agricultural properties in the path of development article i nfo article history this paper estimates the value of water rights in a rapidly urbanizing semi arid area phoenix arizona to do this we use hedonic pricing to explore the impact of water rights on property values in 151 agricultural land transactions that occurred between 2001 and 2005 we test two main hypotheses 1 that the marginal will ingness to pay for water rights is higher in more developed urbanizing areas than in less developed rural areas and 2 that the marginal willingness to pay for water rights in urban areas is increasing in the value of developed land we find that the marginal willingness to pay for water rights is highest among properties in urbanized or urbanizing areas where a significant proportion of the land has already been developed additionally we find that the marginal willingness to pay for agricultural water rights is greatest in cities where developed land is most valuable

how strategic are children and adolescents experimental evidence from normal form games abstract we examine the strategic sophistication of 196 children and adolescents aged 10 17 years in experimental normal form games besides choices we also elicit first and second order beliefs the share of subjects playing nash or expecting opponents to play nash is fairly stable across all age groups the likelihood of playing best response to own beliefs increases in math skills using a mixture model about 40 of subjects are classified as a strategic type while the others are non strategic the distribution of types is somewhat changing with age the estimated error rates also show some dependency on age and gender

neoliberalism and lower class voting behavior in peru it is often assumed that lower classes will resist market oriented neoliberal reforms that impose economic austerity on popular sectors and exacerbate social inequalities however the peruvian cas

on the past and future of china s township and village owned enterprises abstract this paper proposes an explanation of the historical success of industrial enterprises owned by township and village governments in china i argue that conditions peculiar to china s prereform economy fostered the growth of a skilled workforce and high savings created unusual market niches and encouraged entrepreneurial undertakings by local political elites especially in areas adjacent to certain cities i then discuss the allocative and technical efficiency of local public enterprises in china from a theoretical standpoint and review some relevant econometric findings finally i consider proposals for reform of town and village enterprise tve ownership and discuss the possible advantages of cooperative forms

the advantage of resource queues over spot resource markets decision coordination in experiments under resource uncertainty farmers have to make key decisions such as which crops to plant or whether to prepare the soil before knowing how much water they will get they face losses if they make costly decisions but do not receive water and they may forego profits if they receive water without being prepared we consider the coordination of farmers decisions such as which crops to plant or whether to prepare the soil when farmers must divide an uncertain water supply we compare ex ante queues pre decision to an ex post spot market post decision post rain in experiments in rural brazil and a university in england queues have greater coordination success than does the spot market

appropriative water rights and the efficient allocation of resources this paper investigates the allocative efficiency of the appropriative system of water rights within the context of a simplified model of a water using industry at a long run competitive equilibrium for the industry and with a prohibition on the transfer of water rights among firms it is shown that 1 senior appropriators claim and use more water than junior appropriators 2 senior appropriators bear less risk than junior appropriators 3 the allocation of water and diversion capacitie 6among firms is inefficient being dominated by an equal sharing among firms the equal sharing allocation which is pareto optimal when diversion capacities are supplied by a competitive leasing industry can be achieved under the appropriative system if there are competitive markets in water rights and in leases for the use of diversion capacities an application of the coase theorem

economic behavior of children and adolescents a first survey of experimental economics results abstract about 15 years ago economic experiments with children and adolescents were considered as an extravagant niche of economic research since then this type of research has exploded in scope and depth it has become clear that studying the development of economic behavior and its determinants is important to understand economic behavior of adults and to provide a basis for potential policy interventions with respect to economic behavior in childhood and adolescence given the huge increase of papers we provide the first overview of economic experiments with children and adolescents we focus on the following aspects rationality of choices risk preferences time preferences social preferences cooperation and competitiveness all of these aspects are analyzed with respect to the influence of age and gender and we also consider the role of socio economic status or interventions

heterogeneity in risky choice behaviour in a broad population we analyse risk preferences using an experiment with real incentives in a representative sample of 1 422 dutch respondents our econometric model incorporates four structural parameters that vary with observed and unobserved characteristics utility curvature loss aversion preferences towards the timing of uncertainty resolution and the propensity to choose randomly rather than on the basis of preferences we find that all four parameters contribute to explaining choice behaviour the structural parameters are significantly associated with socio economic variables but it is essential to incorporate unobserved heterogeneity in each of them to match the rich variety of choice patterns in the data

cadillac desert revisited property rights public policy and water resource depletion to alleviate arizona s dependence on groundwater the federal government subsidized construction of the central arizona project cap to import water from the colorado river in exchange for the subsidy arizona reformed its groundwater law to eliminate common property pumping and to ban groundwater mining after the year 2025 we build a model of water resource development in which imported water is a capacity constrained backstop the model is applied to quantify the welfare effects of alternative cap construction dates and arizona groundwater laws we reach two general conclusions first cap was completed 86 years too early in 1987 at a deadweight loss of 2 612 billion ironically construction in 1987 yielded lower surplus than never constructing cap second the political exchange of reform for subsidy introduced a greater loss 2 612 billion than it corrected 0 810 billion the exchange was worse than doing nothing at all

resource rights and markets in a general equilibrium model of production rights to a free resource lead to distributional deadweight losses in partial equilibrium the present paper examines related distortions in a general equilibrium model of production with output prices constant for the small open economy the free resource can result in lower output than a market with weak substitution in the other sector the free resource also leads to a convex production frontier implying a price increase lowers output in the sector regarding policy an import tariff export subsidy or price support would lower sector output these general equilibrium distortions increase the incentives to favor resource markets over rights

the problem of the commons still unsettled after 100 years the problem of the commons is more important to our lives and thus more central to economics than a century ago when katharine coman led off the first issue of the american economic review as the us and other economies have grown the carrying capacity of the planet in regard to natural resources and environmental quality has become a greater concern particularly for commonproperty and open access resources the focus of this article is on some important unsettled problems of the commons within the realm of natural resources there are special challenges associated with renewable resources which are frequently characterized by open access an important example is the degradation of openaccess fisheries critical commons problems are also associated with environmental quality a key contribution of economics has been the development of market based approaches to environmental protection these instruments are key to addressing the ultimate commons problem of the twenty first century global climate change jel q15 q21 q22 q25 q54

economic valuation of biodiversity sense or nonsense this paper critically evaluates the notion and application of economic monetary valuation of biological diversity or biodiversity for this purpose four levels of diversity are considered genes species ecosystems and functions different perspectives on biodiversity value can be characterized through a number of factors instrumental vs intrinsic values local vs global diversity life diversity vs biological resources etc a classification of biodiversity values is offered based on a system of logical relationships among biodiversity ecosystems species and human welfare suggestions are made about which economic valuation methods can address which type of biodiversity value the resulting framework is the starting point for a survey and evaluation of empirical studies at each of the four levels of diversity the contingent valuation method is by far the most used method an important reason is that the other valuation methods are unable to identify and measure passive or nonuse values of biodiversity at first sight the resulting monetary value estimates seem to give unequivocal support to the belief that biodiversity has a significant positive social value nevertheless most studies lack a uniform clear perspective on biodiversity as a distinct concept from biological resources in fact the empirical literature fails to apply economic valuation to the entire range of biodiversity benefits therefore available economic valuation estimates should generally be regarded as providing a very incomplete perspective on and at best lower bounds to the unknown value of biodiversity changes 2001 elsevier science b v all rights reserved

looking backward to look forward water use and economic growth from a long term perspective recent research has examined the relationship between natural resources and economic growth considered vitally important not only for humanity s well being but also for the integrity of the ecosystem the relationship between water use and economic growth has nevertheless traditionally attracted little attention by analysts this article studies water use trends from 1900 to 2000 throughout the world and their relationship to the main determinants of economic growth to do this we first analyse water use trajectories second to proceed with the determinants of water use we reformulate the ehrlich and holdren s impact population affluence technology ipat equation 1971 decomposing water use trends into changes in economic demands and in water use intensity on the basis of a decomposition analysis finally a simple scenario analysis is conducted to project future water use trends under different economic demographic and technological assumptions the empirical evidence shows that economic and

adaptation to an irrigation water restriction imposed through local governance abstract we estimate how farmers adapted to a water restriction imposed through local governance the restriction imposed a uniform quota on water use with a 5 year allocation and allowed trading of the quota within the restricted area our analysis exploits unique micro level data on irrigated water use irrigated acreage and crops we use a difference in differences econometric strategy that also includes farmer time fixed effects to estimate the response to the restriction where we exploit water rights between 2 and 5 miles of the policy boundary as a control group results indicate that farmers reduced water use by 26 due to the policy with most of the response due to reductions in water use intensity on the same crops rather than through reductions in irrigated acreage or changes in crops the results imply that the short run welfare impact of the policy was smaller than a policy that reduces irrigated acreage

social inequalities in reforming state socialism between redistribution and markets in china this article extends market transition theory to an analysis of inequality under the conditions of partial reform in china logit regression analysis indicates cadres officials have no greater odds than other households of being among the privileged or avoiding poverty entrepreneurs andformer team cadres however are advantaged despite the rise of a hybrid elite of entrepreneurs who are currently cadres that capitalizes on redistributive power to gain competitive advantage in the marketplace increases in income inequality are modest when market reform stimulates improved economic performance the poor appear to benefit and experience comparable improvements in household income as a result there is only a slight increase in inequality at least in the early stages of market reform the empirical analysis is based on survey data collected in rural china in 1985

public support for economic reforms in poland using monthly surveys the author examines the impact of aggregate economic conditions on the dynamic of support for the polish program of economic reforms the balcerowicz plan to highlight the ambiguity of the standard retrospective model the author analyzes the impact of subjective perceptions of economic conditions on postures toward the reform program asking if people were extrapolating the past when forming predictions about the future then the effect of these predictions on the postures toward reform is studied finally the author focuses on the distributional effects substantive conclusions concerning the impact of economic conditions on the support of economic reform programs under democracy close the article

markets for water rights under environmental constraints abstract the cumulative impact of pollutants on water quality at a given location along a river is a function of prior loadings as well as pollution and surface flows at that particular site the question of whether it is possible to maintain water quality under alternative mechanisms for allocating surface water and pollution rights is addressed we model the optimal allocation of surface water and pollution rights along a river with water quality constraints due to cumulative effects the shadow values of water and pollution rights are contingent on location it is shown that a nash equilibrium in a market for tradable surface water rights in conjunction with a market for pollution damages implements the optimal solution the market supports location specific prices for both consumptive water rights and pollution damages

allocating resources in an uncertain world water management and endangered species instream flows may be essential in protecting aquatic species that are threatened or endangered an economic model of the optimal allocation of water under pure uncertainty is developed with particular attention paid to the situation when a species characterized by critical depensation is affected by instream flows we adopt the notion of pure uncertainty that frank knight and daniel ellsberg intended which applies when decision makers cannot reduce their uncertainty to a unique probability distribution following recent work by hansen sargent and others we employ robust control as a way to deal with this problem copyright 2008 oxford university press

non market valuation in integrated assessment modeling the benefits of water right retirement abstract the impact of resource management on natural capital value depends on processes that affect resource stocks over space and time we develop an integrated assessment modeling framework that links econometric estimates of non market benefits from a resource stock to a spatially explicit model of resource dynamics results from a dichotomous choice contingent valuation survey are used to estimate a marginal willingness to pay function for groundwater which has no market we use the model to measure the economic benefits to agricultural producers of a program that pays for water right retirement under the baseline scenario without water right retirement the benefits from groundwater stocks in the study region decline in value by 3 6 million over 15 years because of groundwater depletion water right retirement leads to groundwater benefits that are 0 55 million higher than in the baseline after 15 years but benefits vary greatly over space comparing this to an explicit program cost of 45 million suggests that other social benefits from groundwater stocks must exist to justify the program from a benefit cost perspective valuing the economic benefits from increasing natural capital stocks can inform policy and provide insight into the value of management in resource and environmental systems

an integrated analysis of the effects of local water institutions on irrigated agriculture outcomes in the arid western united states abstractirrigation water rights and their governance structures constitute the foundation of local water institutions and profoundly influence water resource allocations irrigated agricultural productivity and other consumptive water uses in the arid climate zones this article explores the regional structures of irrigation water rights and water governance and empirically analyses the priority effects of water rights on irrigated agriculture at the micro level in idaho an arid and semiarid state in the western united states we integrate a unique data set of water rights and water supplies with agricultural features and environmental characteristics into our empirical analysis results indicate that seniority in water resources allocation has significant positive effects on both the average crop revenue and crop water use efficiency local water rights structures differ significantly in seniority and water sources from region to region in response to the heterogeneity in local water rights structures

public opinion and market reforms the limits of economic voting the broadly held view that promarket reforms are good for most people is in conflict with the equally broadly held view that in democracies reforms will generate widespread resistance resistance is expected because reforms typically produce economic downturns at least over the short term under normal circumstances we expect citizens to withdraw support from governments during periods of economic decline if citizens withdraw support then governments worried about the next election may abandon reforms but our expectations should be different of new democracies pursuing promarket reforms citizens may believe governments when they claim that things have to get worse before they get better or that economic stagnation is the fault of the past model research in poland peru and mexico reported in this special issue supports these expectations hence under democracy there is more scope for support of painful reforms than frequently acknowledged

the political economy of transformation this article gives an analysis of the political economy of transformation which stresses the major achievements of some countries the fact that the transformation is not yet over the existence of both winners and losers and the limitations of transition orthodoxy attention is paid to the implications of transformation up until now for social philosophy and the washington consensus it is argued that among the surprises of transformation were the importance of a sound banking system of a strong but limited state and the fact that transformation is a long and difficult process in addition the initial stress on the need for rapid privatization turned out to be one sided more important for the resumption of economic growth is the development of new private firms there are political dangers on the road ahead which for the successful applicants will be reduced by eu membership

adolescents cognitive ability and minimax play we conduct experiments with adolescent participants on repeated fixed play in three different zero sum games which have mixed strategy minimax solutions further we collect subject information on cognitive abilities and participation rates in competitive activities we find the adolescents correspondences with and deviations from minimax play largely consistent with previously and widely studied adult populations further we find strategic sophistication in terms of implementation of the mixed minimax strategy as well as earnings are not correlated with cognitive ability or experience in competitive situations

understanding economic policy reform one of the eventual consequences of the global debt crisis was a wave of market oriented economic reforms this paper discusses the state of our knowledge on the political economy of this process why were inefficient and often unsustainable policies maintained for so long why are so many governments reforming now after decades of adherence to policies of an opposite kind have the reformers internalized the correct lessons from the east asian experience finally are there any helpful rules for reformers to follow in guiding their policies through complicated political terrain

an analysis of irrigated agricultural outcomes under the prior appropriation doctrine hypotheses and applications this article measures irrigated agricultural outcomes under the prior appropriation doctrine by developing a model of farmers land allocations in response to water supply change the modelling approach considers the institutional factors of water rights and permits the inclusive determination of water and land allocations we utilize farm level data of irrigated agriculture in water district 1 in idaho to examine the predictions from our theoretical model the water rights priority date is consolidated at the farm level and used to differentiate farmers responses we test a set of hypotheses that relate to water supply and crop revenue our results suggest that the water rights priority has a profound impact on agricultural outcomes indicating strong institutional effects and weak influence of market based approaches farmers respond to both long term and seasonal water supply change and variation and they respond to seasonal water supply forecasts in varied ways depending on their water rights portf

institutional path dependence in climate adaptation coman s some unsettled problems of irrigation districts that emerged in the american west in the late nineteenth and early twentieth centuries in response to aridity to facilitate agricultural water delivery use and trade raise the transaction costs today of water markets these markets are vital for smooth reallocation of water to higher valued uses elsewhere in the economy and for flexible response to greater hydrological uncertainty this institutional path dependence illustrates how past arrangements to meet conditions of the time constrain contemporary economic opportunities they cannot be easily significantly modified or replaced ex post

current issues in the economics of groundwater resource management the issue of groundwater management remains a practical concern in many regions throughout the world while water managers continue to grapple with the question of how to manage this resource in this article we attempt to bring the most advanced and appropriate tools to bear on the issue of resource allocation involving groundwater our objective is to demonstrate the state of the art in the literature on ways to think about this complex resource and to deal with the important economic issues emanating from its complexity we present the conceptual framework within which economists examine the elements interacting in the management of groundwater resources indicate why the role of the market is limited with respect to the price of this very complex resource and point to the mechanisms that can pull competitive groundwater price and quality graded quantity of groundwater in line with their equilibrium levels in particular we critically review economic models of groundwater use examine the potential for groundwater management discuss the difficulties encountered in the estimation of the relevant control variables of such models and identify the advantages and limitations of the instruments devised for the efficient use allocation of this resource finally we argue that devised regulatory schemes usually ignore the information and knowledge needed for their implementation and we suggest a core of conditions necessary for successful groundwater management reforms

giving birds a starting date the curious social solution to a water resource issue in the u s west abstract examining a natural resource management system we show that what first looks like rigid path dependency is actually stepped incremental change the theoretical question then arises of whether it is possible to predict when a natural resource governance system will follow such an incremental path of institutional change our investigation of the prior appropriation water rights system as administered in the state of wyoming reveals that mental models based on factors such as strong personal connections with administrators plus strong confidence in the system tend to favor incremental change we note that choosing incremental change is not without risk while systems that undertake wholesale and rapid change risk a good deal exposing themselves to a potential shower of unanticipated consequences systems that follow the path of incremental change also take risks incremental change may mean successful accommodation of new needs that demand attention or it may be too little too late ultimately allowing the pent up pressure of unmet needs to push the system over a threshold into collapse

governing china s transition to the market institutional incentives politicians choices and unintended outcomes this essay reviews two books that seek to account for china s success in making economic reforms and sustaining rapid growth one perspective explains china s reformist approach in terms of politicians making choices under certain institutional rules the other sees an economic logic of market transition and emphasizes policymakers limited abilities in governing the economy the essay assesses the merits of these competing claims it calls for better specification of the causal linkages between institutional rules and politicians choices and concludes that both the dynamics and dilemmas of china s political economy are explained in terms of increasing market competition finally the essay evaluates the argument that decentralization leads to market segmentation and points to the chinese government s evolving role in dealing with the economy

efficient spatial allocation of irrigation water in the presence of conveyance losses the efficient quantity of water applied falls with distance from the water source but the amount of water sent including conveyance losses actually increases with distance from the source except toward the tail end of the inigation system this implies that if marginal cost pricing were implemented farmers at the middle and lower reaches of the system would have to pay more money for less water received the model is illustrated and alternative financing schemes compared for an empirically derived demand function for imgation water despite massive public investments in irrigation infrastructure ex post evaluations of irrigation projects in developed and developing countries indicate that actual benefits are substantially below projected levels considerable evidence suggests that these low benefits are largely the result of poor on farm water use efficiencies and rent seeking activities that result from water charges that are low and often unrelated to water use chaudhry repetto bowen and young for example farmers near the system headworks are said to consume a disproportionate share of irrigation water while tail farmers are left with scanty and unreliable residual supplies reidinger wade many governments faced with increasing political pressure to conserve water and reduce fiscal deficits are considering higher water charges to decrease waste and increase cost recovery from project beneficiaries there is also increased awareness that low water charges and loosely enforced water rationing guidelines lead to environmental damages and excessive mining of groundwater resources in general the problems of water allocation and low user charges contribute to derivative problems in achieving efficiency equity fiscal stability and environmental sustainability

spot water markets and risk in water supply water availability patterns in semiarid regions are typically extremely variable even in basins with a highly developed infrastructure users are subject to unreliable water supplies incurring substantial economic losses during periods of scarcity more flexible instruments such as voluntary exchanges of water among users can help users to reduce risk exposure this article looks at the effects of spot water markets on the economic risk caused by water availability variations our theoretical and empirical risk analyses are based on the random profits of water users profit probability density functions are formally and graphically characterized for both water sellers and buyers under several possible market outcomes we conclude from this analysis that where water supply is stochastic water markets unambiguously reduce both parties risk exposure the empirical study is conducted on an irrigation district in the guadalquivir valley southern spain where there is a high probability of periods of extreme water scarcity water demand functions for the district representative irrigators and a spatial equilibrium model are used to simulate market exchanges and equilibrium this programming model is combined with statistical simulation techniques we show that the profit probability distribution of a representative irrigator is modified if water exchanges are authorized leading to risk reductions results also indicate that if the market were extended to several districts and users that are subject to varying hydrological risk exposure extremely low profit events would be less likely to occur in sum we show that exchanging water in annual spot markets can reduce farmers economic vulnerability caused by water supply variability across irrigation seasons these results support the water policy reform carried out in spain in 1999 to allow for voluntary water exchanges among right holders

complements and substitutes in sequential auctions the case of water auctions we use data on sequential water auctions to estimate demand when units are com plements or substitutes a sequential english auction model determines the estimating structural equations when units are complements one bidder wins all units by paying a high price for the first unit thus deterring others from bidding on subsequent units when units are substitutes different bidders win the units with positive probability paying prices similar in magnitude even when the same bidder wins all units we re cover individual demand consistent with this stark pattern of outcomes and confirm it is not collusive but consistent with non cooperative behavior demand estimates are biased if one ignores these features

factors influencing kansas agricultural farm land values land transactions typically involve a substantial investment of time and money for parties involved in the sale because of the size of the investment and infrequency of purchases sales significant personal interaction between buyer and seller often results in this study farmland sales in 104 of 105 kansas counties from 1986 2000 were examined to quantify the influence of personal relationships and changes over time transactions between related parties resulted in a 43 discount on the per acre sales price results indicated that social capital effects have increased over time with the discount on sales between related parties growing 2 per year

water sharing agreements sustainable to reduced flows by signing a water sharing agreement wsa countries agree to release an amount of river water in exchange for a negotiated compensation we examine the vulnerability of such agreements to reduced water flows among all wsas that are acceptable to riparian countries we find out the one which is self enforced under the most severe drought scenarios the so called upstream incremental wsa assigns to each country its marginal contribution to its followers in the river its mirror image the downstream incremental wsa is not sustainable to reduced flow at the source self enforcement problems can be solved by setting water releases and compensations contingent to water flow we apply our analysis to the aral sea basin we compute the upstream incremental compensations for the bishkek agreement and asses its vulnerability with historical flows

the value of heterogeneous property rights and the costs of water volatility the system of prior appropriation in the western unites states prioritizes property rights for water based on the establishment of beneficial use creating a hierarchy where rights initiated first are more secure i estimate the demand for security in water rights through their capitalization in agricultural property markets in the yakima river basin a major watershed in washington state all water rights are satisfied in an average year so the relative value of secure property rights is a function of water supply volatility and the costs of droughts are predominantly born by those with weak rights in aggregate security in water rights does not capitalize into property values at the irrigation district level however there is heterogeneity in the premium for secure water rights the lack of a premium for district level water security is robust to a variety of econometric methods to account for correlated district unobservables and the null result produces an economically significant upper bound on the value to water security for the district the ability for farmers to adapt to water supply volatility as well as expectations about water markets and government infrastructure investment are leading explanations for the lack of an aggregate premium these explanations are supported by the pattern of heterogeneity in the water security premium

exploring the capability to reason backwards an experimental study with children adolescents and young adults this is the first study investigating the development of the capability to reason backwards in children adolescents and young adults aged 6 to 23 under controlled laboratory conditions the experimental design employs a modified version of the race game as in the original game subjects need to apply backward analysis in order to solve the games we find that subjects capability to reason backwards improves with age but that this process systematically differs across genders our repetition of the games indicates that differences exist also in learning between age groups and across genders

allocation and pricing at the water district level efficient water pricing schemes are introduced for nonprofit water agencies where members have property rights based upon historical usage the existing average cost rate design is compared with the proposed designs active trading and passive trading both schemes lead to efficiency but passive trading has operational advantages since it generates less transaction costs than active trading block rate pricing is shown to be suboptimal and inferior to passive trading an example from the israeli water economy is used as an empirical illustration

cluster sample methods in applied econometrics inference methods that recognize the clustering of individual observations have been available for more than 25 years brent moulton 1990 caught the attention of economists when he demonstrated the serious biases that can result in estimating the effects of aggregate explanatory variables on individual specific response variables the source of the downward bias in the usual ordinary least squares ols standard errors is the presence of an unobserved state level effect in the error term more recently john pepper 2002 showed how accounting for multi level clustering can have dramatic effects on t statistics while adjusting for clustering is much more common than it was 10 years ago inference methods robust to cluster correlation are not used routinely across all relevant settings in this paper i provide an overview of applications of cluster sample methods both to cluster samples and to panel data sets

an analysis of the impact of climate change on crop yields and yield variability this paper develops an econometric model of stochastic production functions to quantify the impacts of climatic variables on the mean variance and covariance of crop yields the estimates of the production function parameters and their elasticities are utilized to analyse the impacts of the projected climate change on agriculture the results show that the climate change will have modest effects on the mean crop yields but will significantly reduce the variance and covariance for most of the crops considered the results have implications for allocations of agricultural land among crops and for crop production mix

the market value of water in the ogallala aquifer the ogallala aquifer also known as the ogallala formation or the high plains aquifer is a 174 000 square mile body of water that underlies parts of colorado kansas nebraska new mexico oklahoma south dakota texas and wyoming the ogallala contains about 3 5 billion acre feet of water symposium ii 1984 but in many areas the aquifer has been declining from continued deep well pumping sloggett and dickason 1986 the aquifer receives little recharge especially in the southern portion and as such represents a finite nonrenewable resource stock as a result of the concerns of residents of the high plains states over declines in the ogallala aquifer congress authorized the secretary of commerce to conduct a six state regional resources study of the ogallala in 1976 high plains associates 1982 the study indicated even under the most effective water conservation program more than a million acres of farmland then

strategic sophistication of individuals and teams experimental evidence many important decisions require strategic sophistication we examine experimentally whether teams act more strategically than individuals we let individuals and teams make choices in simple games and also elicit first and second order beliefs we find that teams play the nash equilibrium strategy significantly more often and their choices are more often a best response to stated first order beliefs distributional preferences make equilibrium play less likely using a mixture model the estimated probability to play strategically is 62 for teams but only 40 for individuals a model of noisy introspection reveals that teams differ from individuals in higher order beliefs

management of climate risks in agriculture will weather derivatives permeate it is a matter of common knowledge that weather represents the major source of uncertainty in crop production it is to be expected that weather fluctuations will increase in the future due to climate change traditionally farmers tried to protect themselves against weather related yield variations by buying insurances more recently there has been a discussion regarding the use of weather derivatives to safeguard against volumetric risks although weather derivatives display advantages over traditional insurances there is only a relatively small market for these products in agriculture this is partly attributed to the fact that it is unclear whether and to what extent weather derivatives are a useful instrument of risk management in agriculture this study applies real yield and weather data from northeast germany in order to quantify the risk reducing effect that can be achieved in wheat production by using precipitation options to do so stochastic simulation is used the hedging effectiveness is c

politics of economic liberalization in india abstract attempts at liberalizing india s import substitution model of development have had a mixed record some success in changing the policy regime highlights the role of a new technocratic leadership that has received support from both indian business groups and from external aid agencies conversely popular sectors within india including the rank and file of the ruling party the organized workers in the public sector and the numerically significant middle and lower peasantry have registered their opposition while the government remains committed to liberalizing the economy the momentum has slowed down and given the pressures of electoral politics a populist economic program has been simultaneously readopted it appears that the marriage of political and economic liberalism may not be an easy one in countries like india

informing climate adaptation a review of the economic costs of natural disasters abstract this paper reviews the empirical literature on the economic impacts of natural disasters to inform both the modeling of potential future climate damages and climate adaptation policy related to extreme events it covers papers that estimate the short and or long run economic impacts of weather related extreme events as well as studies identifying the determinants of the magnitude of those damages including fatalities the paper also reviews the small number of empirical papers on the potential extent of adaptation in response to changing extreme events

measuring the contributions of site characteristics to the value of agricultural land this study examines the effects of different combinations and qualities of selected site characteristics on the value of agricultural land in six substate regions in washington state the analysis follows the general hedonic regression form but incorporates nonnegativity constraints on the models this coupled with an adaptation of bierens s conditional moment test yields consistent results showing a land value is a function of site characteristics b land markets in washington state are highly regional c parsimonious empirical models can provide adequate representations of expected land values and d nonnegative truncation is a valuable procedure in hedonic models

leading the left to the right populist coalitions and economic reform abstract democratic political parties with a history of commitment to statist economic policies face internal stresses when they come to power and preside over programs of wholesale economic liberalization how do such parties and coalitions avoid splintering and manage to maintain electoral support examining the recent experiences of argentina and mexico edward gibson suggests that one can understand these achievements by treating each party as a combination of two separate components performing distinct functions a metropolitan policy component and a peripheral or rural electoral component his framework travels well beyond latin america and helps illuminate the different politics underlying three recent waves of economic liberalization in sri lanka

the value of remoteness a hedonic estimation of ranchette prices abstract throughout the western united states production ranches are being subdivided into recreation oriented ranchettes this change has dramatic impacts on local environmental and economic viability ranchettes fall in a gap in the economic literature between production agriculture and residential uses this paper presents the first hedonic model for ranchettes introducing the use of remote sensing vegetative indices and the use of sale status of adjacent ranchettes as explanatory variables parcel level sale data in yavapai county arizona is combined with satellite greenness indices it is found that increased greenness raises sale prices access to roads cities and neighbors also increase sale prices implying that isolation is a disamenity and that it may be beneficial for policymakers to encourage ranchette grouping

economic reform and public opinion in peru 1990 1995 even if they are confident that prosperity lies just over the horizon politicians who embark on promarket reforms know they are in for some stormy weather how will they fare in voters eyes once the pain is felt will voters inevitably turn against politicians who impose painful measures without an electoral mandate to do so the story of economic reform and public opinion in peru under alberto fujimori 1990 1995 poses just these questions the author uses monthly public opinion polls and monthly economic data to analyze the impact of economic changes during fujimori s reform program on opinions of the reforms and the president the author finds that limenos withdrew support from the program and the president when employment fell and inflation rose responses consistent with the findings of the economic voting literature but when real wages fell they became optimistic about the future and more likely to support reforms and the government

estimating irrigation water value using hedonic price analysis a case study in malheur county oregon hedonic price analysis is applied to agricultural land sales to reveal the implicit market price of water in irrigation this provides price information where otherwise absent which can facilitate reallocation of water supplies to meet growing demands the failure to include available information on soil quality an impor tant determinant of agricultural land value re sults in erroneous conclusions joint testing of heteroskedasticity and functional form is demon strated the value of irrigation water in this loca tion is estimated at 9 for an acre foot on the least productive land irrigated and up to 44 per acre foot on the most productive land jel q15

the populist road to market reform policy and electoral coalitions in mexico and argentina governing parties face two fundamental tasks they must pursue policies effectively and they must win elections their national coalitions therefore generally include two types of constituencies those that are important for policy making and those that make it possible to win elections in effect governing parties must bring together a policy coalition and an electoral coalition this distinction sheds light on how the transitional costs of major economic policy shifts can be made sustainable in electoral terms it also provides a starting point for analysis of how two of latin america s most important labor based parties the peronist party in argentina and the partido revolucionario institucional pri in mexico maintained electoral dominance while pursuing free market reforms that adversely affected key social constituencies peronism and the pri are conceived of as having encompassed historically two distinctive and regionally based subcoalitions a metropolitan coalition that gave support to the parties development strategies and a peripheral coalition that carried the burden of generating electoral majorities this framework permits a reconceptualization of the historic coalitional dynamics of peronism and the pri and sheds light on the current process of coalitional change and economic reform

hedonic price analysis and selectivity bias hedonic valuation of quality attributes can be misleading when theassumption that these attributes are exogenous to sample selection isviolated this paper considers the simultaneity between hedonic valuationand sample selection in the context of a model of producer behavior andinvestigates empirically the case where land is demanded for use as an inputeither in agricultural production or in touristic development the empiricalanalysis suggests that failing to correct for sample selection results in abiased valuation of the effect of water salinity on agricultural land