Date of Completion

2016

Document Type

Honors College Thesis

Department

Economics

Type of Thesis

Honors College, College of Arts and Science Honors

First Advisor

Donna Ramirez-Harrington

Keywords

water supply, transaction costs, water allocation, water markets, agricultural economics, water transfers

Abstract

Allocation of water in the Upper Colorado River Basin is currently determined by the system of prior appropriation; a legal structure that has led to an inefficient allocation of water in the basin. A market for tradable water rights is proposed that would allow for a more optimal allocation to be achieved. An analytical framework for the analysis of water allocation systems is presented and its application to a hypothetical Upper Basin market is discussed. A quantitative model is designed that simulates a market for tradable water rights permits in the Upper Basin, with an emphasis on transaction costs. The simulated market is found to provide a more socially and economically efficient allocation of water for the Upper Basin than currently exists.

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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