Social and Behavioral Sciences Commons^™

A Spatial Model Of Optimal Water Conveyance, Ujjayant N. Chakravorty, Eithan Hochman, David Zilberman

Ujjayant Chakravorty

Most water projects suffer from losses in conveyance. Because conveyance has public good characteristics, investment in reducing conveyance losses must be provided by a central authority. This paper develops a spatial model to determine optimal conveyance investment, water allocation, and investment in firm-specific conservation technology. The efficiency and distributional characteristics of the optimal solution are compared to projects with (i) well-developed water markets and (ii) spatially uniform water prices, both with sub-optimal conveyance. A numerical illustration is provided.