Document Type : Research Article
Authors
Department of Agricultural Economics, College of Agriculture, Shiraz University
Abstract
Abstract
Water pricing is a policy instrument for improving water efficiency, reducing water demand, management of the irrigation systems and recovering costs. The underlying principle of water pricing is that it should reflect the opportunity cost of water. In this study, Parametric Mathematical Programming approache were used to estimate the willingness of farmers to pay for groundwater under different conditions of water supply and crop patterns and during different time periods. Required data were obtained from a random sample of 190 farmers in Ramjerd Plain using Stratified Random Sampling. The results provided indicated that the average WTP value varies between 427 to 562 Rials/m3. So, farmers are willing to pay at least one and half times the prevailing price of water. The WTP of farmers who use groundwater and surface water conjunctively was less than the WTP of farmers who use only groundwater. The results also showed that water demand is elastic in wet seasons (η=1.37) but it is inelastic in dry seasons (η=0.39. Finally, farmers tend to use deficit irrigation strategies and to improve water efficiency when water price increases.
JEL classification: C13, C14, Q25, Q28
Keywords: Water pricing, Willingness to pay, Valuation, Parametric Mathematical Programing, Ramjerd Plain
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