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Chapter 4 - Optimal Water Policy

Published online by Cambridge University Press:  21 April 2021

Ariel Dinar  and
Yacov Tsur
Ariel Dinar
Affiliation:
University of California, Riverside
Yacov Tsur
Affiliation:
Hebrew University of Jerusalem
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Summary

The chapter characterizes the optimal water policy, i.e., the feasible policy (under physical, institutional, and budgetary constraints) that generates the highest payoff (social welfare) to the water economy. The optimal policy involves water allocations from the different sources to the different sectors/users and the investments in infrastructure needed to carry out these allocations. It is shown that the optimal policy begins with an infrastructure construction stage (which is usually short), followed by a turnpike stage that eventually converges to a steady state, during which water allocations, capital stocks, and investment rates remain constant over time.

Keywords

optimal policyinfrastructure constructionturnpikesteady statewater sourceswater users
Type
Chapter
Information
The Economics of Water Resources
A Comprehensive Approach
 , pp. 75 - 93
Publisher: Cambridge University Press
Print publication year: 2021

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References

Dorfman, R., Samuelson, P., and Solow, R.. 1958. Linear Programming and Economic Analysis. New York: McGraw-Hill.Google Scholar
Leonard, D., and Long, N.. 1992. Optimal Control Theory and Static Optimization in Economics. Cambridge: Cambridge University Press.Google Scholar
Spence, M., and Starrett, D.. 1975. Most Rapid Approach Paths in Accumulation Problems. International Economic Review, 16(2), 388–403.Google Scholar
Tsur, Y. 2009. On the Economics of Water Allocation and Pricing. Annual Reviews of Resource Economics, 1, 513–535.Google Scholar
Tsur, Y. 2020. Optimal Water Pricing: Accounting for Environmental Externalities. Ecological Economics, 170, 106429.Google Scholar
Tsur, Y., and Zemel, A.. 2000. R&D Policies for Desalination Technologies. Agricultural Economics, 24, 73–85.Google Scholar
Tsur, Y., and Zemel, A.. 2014. Steady-State Properties in a Class of Dynamic Models. Journal of Economic Dynamics and Control, 39, 165–177.Google Scholar
Tsur, Y., and Zemel, A.. 2018. Water Policy Gguidelines: A Comprehensive Approach. Water Resources and Economics, 23, 1–13.Google Scholar

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  • Optimal Water Policy
  • Ariel Dinar, University of California, Riverside, Yacov Tsur, Hebrew University of Jerusalem
  • Book: The Economics of Water Resources
  • Online publication: 21 April 2021
  • Chapter DOI: https://doi.org/10.1017/9781316678640.005
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  • Optimal Water Policy
  • Ariel Dinar, University of California, Riverside, Yacov Tsur, Hebrew University of Jerusalem
  • Book: The Economics of Water Resources
  • Online publication: 21 April 2021
  • Chapter DOI: https://doi.org/10.1017/9781316678640.005
Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

  • Optimal Water Policy
  • Ariel Dinar, University of California, Riverside, Yacov Tsur, Hebrew University of Jerusalem
  • Book: The Economics of Water Resources
  • Online publication: 21 April 2021
  • Chapter DOI: https://doi.org/10.1017/9781316678640.005
Available formats
×