Water Trading: Locational Water Rights, Economic Efficiency, and Third-Party Effect
Rivers flow downstream and unidirectionally. However, this fact has not yet been utilized in the institutional design for water trading. By utilizing this characteristic, we first designed a water trading system of “locational water rights.” This new system is able to mitigate the return flow-relate...
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doaj-dcca460ec24d424889cf6573530134eb2020-11-24T21:13:46ZengMDPI AGWater2073-44412014-03-016372374410.3390/w6030723w6030723Water Trading: Locational Water Rights, Economic Efficiency, and Third-Party EffectMing-Feng Hung0Daigee Shaw1Bin-Tzong Chie2Department of Industrial Economics, Tamkang University, Tamsui District, New Taipei City 251, TaiwanInstitute of Economics, Academia Sinica, Nankang, Taipei City 115, TaiwanDepartment of Industrial Economics, Tamkang University, Tamsui District, New Taipei City 251, TaiwanRivers flow downstream and unidirectionally. However, this fact has not yet been utilized in the institutional design for water trading. By utilizing this characteristic, we first designed a water trading system of “locational water rights.” This new system is able to mitigate the return flow-related and instream flow-related third-party effects of volumetric reliability from water transfers. We provided mathematical proof of its economic efficiency. We then applied this water trading system to the case of the Choushui River basin in Taiwan. In this area, agriculture is highly developed while domestic and industrial water demands have increased rapidly. Using an agent-based model simulation, we estimated the potential economic benefits of implementing the system of locational water rights in the Choushui River basin.http://www.mdpi.com/2073-4441/6/3/723water marketlocational water righteconomic efficiencythird-party effectreturn flows |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Ming-Feng Hung Daigee Shaw Bin-Tzong Chie |
spellingShingle |
Ming-Feng Hung Daigee Shaw Bin-Tzong Chie Water Trading: Locational Water Rights, Economic Efficiency, and Third-Party Effect Water water market locational water right economic efficiency third-party effect return flows |
author_facet |
Ming-Feng Hung Daigee Shaw Bin-Tzong Chie |
author_sort |
Ming-Feng Hung |
title |
Water Trading: Locational Water Rights, Economic Efficiency, and Third-Party Effect |
title_short |
Water Trading: Locational Water Rights, Economic Efficiency, and Third-Party Effect |
title_full |
Water Trading: Locational Water Rights, Economic Efficiency, and Third-Party Effect |
title_fullStr |
Water Trading: Locational Water Rights, Economic Efficiency, and Third-Party Effect |
title_full_unstemmed |
Water Trading: Locational Water Rights, Economic Efficiency, and Third-Party Effect |
title_sort |
water trading: locational water rights, economic efficiency, and third-party effect |
publisher |
MDPI AG |
series |
Water |
issn |
2073-4441 |
publishDate |
2014-03-01 |
description |
Rivers flow downstream and unidirectionally. However, this fact has not yet been utilized in the institutional design for water trading. By utilizing this characteristic, we first designed a water trading system of “locational water rights.” This new system is able to mitigate the return flow-related and instream flow-related third-party effects of volumetric reliability from water transfers. We provided mathematical proof of its economic efficiency. We then applied this water trading system to the case of the Choushui River basin in Taiwan. In this area, agriculture is highly developed while domestic and industrial water demands have increased rapidly. Using an agent-based model simulation, we estimated the potential economic benefits of implementing the system of locational water rights in the Choushui River basin. |
topic |
water market locational water right economic efficiency third-party effect return flows |
url |
http://www.mdpi.com/2073-4441/6/3/723 |
work_keys_str_mv |
AT mingfenghung watertradinglocationalwaterrightseconomicefficiencyandthirdpartyeffect AT daigeeshaw watertradinglocationalwaterrightseconomicefficiencyandthirdpartyeffect AT bintzongchie watertradinglocationalwaterrightseconomicefficiencyandthirdpartyeffect |
_version_ |
1716748263463321600 |