Drought Water Rationing and Transferable Rations

Water rationing is a common, but little studied, technique for managing urban water supplies during drought. This paper reviews a wide range of approaches for implementing water rationing for urban drought management. These rationing approaches are assessed in terms of practical and theoretical performance. The paper then examines the potential benefits of allowing drought water rations to be transferable or marketable. Transferable rights have become a common suggestion for allocating scarce resources for a wide range of water-quantity and water-quality problems. Although attractive in terms of economic theories of resource allocation, transferable drought water rations often will be uneconomical for small transactions, due to likely high costs of completing transactions. However, transferable drought water rations might be useful for allocating scarce water among large industrial, commercial, and institutional users and among residential users with very different water demands. The equity effects of tra...

[1]  Dennis R. Schurmeier,et al.  Innovative Approaches to Water Allocation: The Potential for Water Markets , 1986 .

[2]  Thomas F. Hogarty,et al.  The impact of large temporary rate changes on residential water use , 1975 .

[3]  Raymond L. Anderson,et al.  ... and the Desert Shall Rejoice: Conflict, Growth, and Justice in Arid Environments , 1978 .

[4]  M. M. Kelso.  Hartman, L. M., and Don Seastone, Water Transfers: Economic Efficiency and Alternative Institutions, Baltimore, The Johns Hopkins Press for Resources for the Future, 1970, xiii + 127 pp. ($5.75) , 1971 .

[5]  J. R. Lund,et al.  Recent California water transfers: Emerging options in water management. Final report , 1992 .

[6]  F. Hayek.  The economic nature of the firm: The use of knowledge in society , 1945 .

[7]  J. Wayland Eheart,et al.  Alternative structures for water rights markets , 1983 .

[8]  Jack A. Weber.  Forecasting Demand and Measuring Price Elasticity , 1989 .

[9]  R. Collinge.  Revenue neutral water conservation: Marginal cost pricing with discount coupons , 1992 .

[10]  Jay R. Lund,et al.  Transaction risk versus transaction costs in water transfers , 1993 .

[11]  S. Rassenti,et al.  Smart Computer-Assisted Markets , 1991, Science.

[12]  J. Nelson.  Northern California Rationing Lessons , 1979 .

[13]  Erhard F. Joeres,et al.  Distribution methods for transferable discharge permits , 1980 .

[14]  K. Chau.  Management of limited water resources in Hong Kong , 1993 .

[16]  J. Moncur.  DROUGHT EPISODES MANAGEMENT: THE ROLE OF PRICE1 , 1989 .

[17]  James Tobin,et al.  A SURVEY OF THE THEORY OF RATIONING , 1952 .

[18]  J. Milliman,et al.  Water Law and Private Decision-Making: A Critique , 1959, The Journal of Law and Economics.

[19]  J. Moncur.  Urban water pricing and drought management , 1987 .

[20]  Lloyd J. Mercer,et al.  WELFARE EFFECTS OF ALTERNATWE WATER RATIONING SCHEMES: A CASE STUDY1 , 1989 .

[21]  Robert W. Hahn,et al.  Marketable Permits: Lessons for Theory and Practice , 1989 .

[22]  Charles W. Howe,et al.  The impact of price on residential water demand and its relation to system design and price structure , 1967 .

[23]  Jay R. Lund,et al.  Metropolitan Water Market Development: Seattle, Washington, 1887–1987 , 1988 .