Ma. Hooker et We. Alexander, ESTIMATING THE DEMAND FOR IRRIGATION WATER IN THE CENTRAL VALLEY OF CALIFORNIA, Journal of the american water resources association, 34(3), 1998, pp. 497-505
This paper computes estimates of the demand for surface irrigation wat
er directly from disaggregated profit functions for fields in the San
Joaquin Valley of California. It finds that treating delivered surface
water and pumped ground water as separate, imperfectly substitutable
inputs to production matters a great deal. We find substantial ranges
of inelastic demand for delivered water, and thresholds across which d
emand then becomes highly elastic. The results imply that moves toward
freer water markets could lead to large quantities reallocated from a
griculture to urban uses in the Western U.S., but would require large
price increases and would induce extensive ground water mining and maj
or changes in cropping patterns. While these results are dependent on
our particular model and simplifying assumptions, evidence exists that
they may be robust.