Water Economics and Policy

Private households around the world use and combine multiple water sources, including diverse forms of market services and self-supply. The reasons for this have so far not been explained in a coherent framework, nor have the implications for water management and policy been sufficiently analyzed. Here, we examine how heterogeneity of water services, household co-production, and risks of provision influence household demand patterns. We apply an economic household production model that incorporates two water quality levels for different household activities to exemplary situations. We derive a number of explanations why households use and combine water services that expand the current state of research. Relevant findings include: (i) The diverse characteristics of available water services result in different time requirements for water procurement and varying degrees of suitability for household activities. (ii) Differences in the value placed on time can induce households to demand heterogeneous water services because these enable them to find a balance between using time and money to access water. (iii) Certain water services may be demanded because they function as insurance against both uncertain and unreliable supply. Our insights are relevant for water policy, in particular for developing and managing demand-responsive systems, and for the implementation and monitoring of normative goals for access to water.

Irrigation has significant potential to enhance productivity, resilience to climatic risks and nutrition security in Sub-Saharan Africa. While the focus has historically been on large-scale dam-based schemes, farmer-managed small-scale irrigation (SSI) has gained increased attention in recent years. Using data from Ethiopia, Tanzania and Ghana, we first examine patterns of adoption of different SSI technologies. Next, we employ hierarchical modelling to examine which variables are associated with observed adoption patterns and cluster effects that explain variation in irrigation adoption. We document significant cross-country variation in adoption patterns and find a positive association between plot-level use of SSI and the intensity of agricultural labor and inorganic fertilizers applied on the plot. Community-level intra-cluster correlation (ICC) is the highest in Tanzania, where gravity-fed irrigation is most common while farm-level ICC is the highest in Ethiopia where motorized technologies are more common. These results suggest the need for localized investments to ease locale-specific potential constraints. For example, easing possible liquidity constraints to acquiring motorized technologies can be more effective in Ethiopia while the construction of dams and improved conveyance systems, as well as the strengthening of community-based irrigation management (e.g., through Water User Associations (WUAs)) can be more effective in Tanzania. Further research is needed to understand pathways for selected plot-level characteristics that affect use of SSI including status of plot ownership and the gender of the plot manager.

The Colorado River is a river system spanning seven states in the United States (US) and two in Mexico. Water in the river has been over-allocated, which has led the Colorado River Delta in Mexico to dry up, thus endangering the indigenous species. The two nations made several temporary, costly allocation agreements to transfer water to the Delta for ecological restoration. However, there is still no long-term economic solution for the Delta, which is what this study aims to address. In this work, I investigate solutions for rerouting water to the Delta that will minimize costs without causing excessive damage to the agrarian economy in the US. The cost of conserving water for the Delta was analyzed using numerical simulations with crop data from the Imperial Irrigation District in California. The objective is to find a policy that would help allocate 100,000 acre-feet per year to the Colorado River Delta at a minimum lifetime cost. Two scenarios are studied that would yield enough water for a sustainable restoration of the ecosystem: fallowing croplands and changing the irrigation system to be more water-efficient. Results indicate that fallowing 20,000 ac of alfalfa would be the least costly way of accumulating this resource at a cost ranging from $5.5 million to $13 million per year for a 31-year time horizon. This paper provides new insight into ways in which the US and Mexico can secure the future of ecosystems like the Colorado River Delta.

Good leaders can greatly influence the effective governance of water resources, however, how their attributes relate to group cooperation in Water User Associations (WUAs) remains an open question. Using the case of Chile, we explore the factors of three non-cooperative behaviors in WUAs by performing a two-stage cluster analysis. The results describe four clusters that differ in structural and human characteristics, where highly cooperative WUAs are characterized by having presidents who dedicate more time to their duties, are more active in applying for governmental subsidies, are embedded in social organizations, have high levels of bridging social capital, and have a positive attitude toward the presidency. Our results add to the limited empirical knowledge about the role of leadership in fostering cooperation in the use of common-pool resources. This article sheds light on this matter as the results suggest that policy interventions should aim at strengthening social capital and providing incentives to increase the time dedication of presidents to the WUAs duties.

Clean water is essential for healthy living and the use of contaminated water is a major source of global and regional burden of disease and mortality in less developed countries. This study identifies the extent of water contamination through standardized laboratory tests from the metropolitan city of Karachi, which is the largest city of Pakistan. Moreover, a household survey data is used to estimate a health production function focusing on waterborne diseases. The study finds the average probability of waterborne diseases and estimates the cost of illness from the sample data. Probability of illness and defensive behavior are proxied by the prevalence of diarrhea and household expenditures on water treatment, respectively. The results show that the likelihood of getting diarrhea is higher among households who make less expenditures on water treatment. Water contamination positively affects and filtration negatively affects the prevalence of diarrhea in the city. Further, the study finds that the total direct monthly health cost of untreated water consumption for the entire population of Karachi is PKR 80.7 million.

Policymakers in Sub-Saharan Africa have placed considerable emphasis on expanding irrigated agriculture. This is in response to the subcontinent’s growing population pressure, coupled with production risks associated with declining and variable rainfall. Irrigation is viewed as an important strategy to improve food security and protect rural livelihoods, with small-scale irrigation identified as the preferred strategy. And yet, adoption of irrigation has been slow, and irrigation investments are often underutilized. Expanding irrigated agriculture through increases in cultivated area alone will not be sufficient for greater food security; land and water productivity of irrigated agriculture needs to be increased, and this may in fact help accelerate the adoption of irrigation. Shared irrigation investments among small farmers are going to be challenging to sustain as smallholder households diversify their livelihoods, and do not cultivate field crops every season. For individual irrigation technologies, many barriers exist in their adoption, especially the risks and ambiguities such as pestilence and borehole installation failures; and governments will have to invest significantly more than they currently do in research and extension efforts to ease these barriers. Finally, the expansion of irrigation, especially individual irrigation, will likely create environmental challenges such as aquifer depletion, water pollution, and soil degradation, which governments would also have to manage by coordinating the actions of individual smallholders. This paper identifies the kind of institutional infrastructure and policy support that African agriculture will need to have in place to expand irrigation beyond its current status.