Graduation Year

2023

Date of Submission

4-2023

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Julio Garin

Reader 2

John Jurewitz

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2023 Abelino Amado Diego FernandezLeger

Abstract

In areas of the United States that experience water scarcity, the availability of water can significantly constrain economic activities, leading to competition among water consuming sectors and between human withdrawals and environmental requirements. Although the allocation of water is a highly contested political issue, some consider the valuation of water as a potential strategy to prevent water wastage. Additionally, water rights transfers have been proposed to allocate water to the most economically efficient uses. The value of water, however, remains difficult to estimate because water markets are not an unconstrained possibility in the U.S.. Despite extensive research on the global and domestic small-scale regional value of water, there has been no recent comprehensive evaluation of the value of irrigation water on a broad scale in the United States. Here I propose a simplified microeconomic crop-production function using county level data resolution for the year 2000. My analysis finds that irrigation water in the US is worth $0.16/m3 which is consistent with past literature for the value of water associated with the types of crops grown in the US. I suggest that this value will continue to incentivize water transfers in the arid west and the expansion and of irrigation east of the 100th meridian.

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