Water Use and Salinity in the Murray-Darling Basin: A State-Contingent Model

The supply of water for irrigation is subject to climatic and policy uncertainty. The object of the present paper is to show how the linear and non-linear programming models commonly used in modelling problems such as those arising in the Murray-Darling Basin may be adapted to incorporate a state-contingent representation of uncertainty. Estimates showing the potential value of improved water use are also derived.

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