Estimating irrigation water value using hedonic price analysis: A case study in Malheur County, Oregon

Hedonic price analysis is applied to agricultural land sales to reveal the implicit market price of water in irrigation. This provides price informati on,,there otherwise absent, which can facilitate reallocation of rt ater su pplies to meet growing demands. The failure to include available informatio n an soil quality, an important determinant of agricultural land value, res ults in erroneous conclusions. Joint testing of heteroskedasticity and func tional form is demonstrated. The value of irrigation water in this location is estimated at $9 for an acre-foot on the least productive land irrigated , and up to $44 per acre-foot on the most productive land. (JEL Q15).