Economics of Water Resources The Contributions of Dan Yaron

246 Pages·2002·4.297 MB·English

by  Ariel Dinar, David Zilberman (auth.)

Economics of Water Resources
The Contributions of Dan Yaron
NATURAL RESOURCE MANAGEMENT AND POLICY
Editors:
Ariel Dinar David Zilberman
Rural Development Department Dept. of Agricultural and
The World Bank Resource Economics
1818 H Street, NW Univ. of California, Berkeley
Washington, DC 20433 Berkeley, CA 94720
EDITORIAL STATEMENT
There is a growing awareness to the role that natural resources such as water, land,
forests and environmental amenities play in our lives. There are many competing uses
for natural resources, and society is challenged to manage them for improving social
well being. Furthermore, there may be dire consequences to natural
resources mismanagement. Renewable resources such as water, land and the
environment are linked, and decisions made with regard to one may affect the others.
Policy and management of natural resources now require interdisciplinary approach
including natural and social sciences to correctly address our society preferences.
This series provides a collection of works containing most recent findings on
economics, management and policy of renewable biological resources such as water,
land, crop protection, sustainable agriculture, technology, and environmental health.
It incorporates modem thinking and techniques of economics and management. Books
in this series will incorporate knowledge and models of natural phenomena with
economics and managerial decision frameworks to assess alternative options for
managing natural resources and environment.
Water is a scarce resource. Therefore, the efficient use of water is an economic issue.
When scarcity is characterized by both quantity and quality, the economics becomes
even more complicated. This book addresses the economic aspects of water quantity
and quality interaction. The book offers a series of analytical and policy chapters that
cover field, farm, and regional-level water allocation issues, as well as international
aspects of water sharing. The book demonstrates the ability and constraints of
economic approaches in solving various water allocation problems.
The Series Editors
Recently Published Books in the Series
Feitelson, Eran and Haddad, Marwan
Management of Shared Groundwater Resources: the Israeli-Palestinian Case with an
International Perspective
Wolf, Steven and Zilberman, David
Knowledge Generation and Technical Change: Institutional Innovation in Agriculture
Moss, Charles B., Rausser, Gordon C., Schmitz, Andrew, Taylor, Timothy G.,
and Zilberman, David
Agricultural Globalization, Trade, and the Environment
Haddadin, Munther J.
Diplomacy on the Jordan: International Conflict and Negotiated Resolution
Just, Richard E. and Pope, Rulon D.
A Comprehensive Assessment of the Role of Risk in U.S. Agriculture
Economics ofWater Resources
The Contributions of Dan Yaron
Collected by
Ariel Dinar
The World Bank, Washington DC, US.A.
And
David Zilberman
University of California, Berkeley, USA
SPRINGER SCIENCE+BUSINESS MEDIA, LLC
Library of Congress Cataloging-in-Publication Data
Dinar, Ariel.
Economics of water resources : the contributions of Dan Yaron / collected by Ariel
Dinar and David Zilberman.
p. cm. - (Natural resource management and policy ; 24)
IncIudes bibliographical references and index.
ISBN 978-1-4613-5294-5 ISBN 978-1-4615-0899-1 (eBook)
DOI 10.1007/978-1-4615-0899-1
1. Water resources development-Economic aspects. 2. Water-supply--Economic
aspects. 3. Water quality management-Economic aspects. 1. Dinar, Ariel, 1947 - II.
Zilberman, David III. Title. IV. Series.
HD1691 .Y372002
333.91---dc21 2002019827
Copyright © 2002 by Springer Science+Business Media New York
Originally published by Kluwer Academic Publishers in 2002
Softcover reprint of the hardcover 1s t edition 2002
All rights reserved. No part ofthis work may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, electronic, mechanical,
photocopying, microfilming, recording, or otherwise, without written permission
from the Publisher, with the exception of any material supplied specifically for
the purpose ofbeing entered and executed on a computer system, for exclusive
use by the purchaser ofthe work.
Permissions for books published in Europe: [email protected]
Permissions for books published in the United States of America: [email protected]
Printed on acid-free paper.
Dan Varon
July 17, 1922 - December 26,1999
CONTENTS
List of Figures ix
List of Tables
Xl
Acknowledgments xiii
Preface xv
1. Dan Yaron: The Person, His Work and His Legacy 1
By Ariel Dinar and David Zilberman
2. The Israel Water Economy: An Overview 9
ByDan Yaron
3. Empirical Analysis of the Demand for Water by Israeli 21
Agriculture
By Dan Yaron
4. Wheat Response to Soil Moisture and the Optimal Irrigation 35
Policy under Conditions of Unstable Rainfall
By Dan Yaron, Gadi Strateener, Dani Shimshi and Mordechai Weisbrod
5. A Model for the Economic Evaluation of Water Quality 51
in Irrigation
By Dan Yaron and Eshel Bresler
6. Application of Dynamic Programming in Markov Chains to the 63
Evaluation of Water Quality in Irrigation
By Dan Yaron and Amikam Olian
7. A Model for Optimal Irrigation Scheduling with Saline Water 73
By Dan Yaron, Eshel Bresler, Hanoch Bielorm' and Biniamin Harpinist
8. Optimal Allocation of Farm Irrigation Water during 89
Peak Seasons
By Dan Yaron and Ariel Dinar
9. The Value of Information on the Response Function efCrops to 105
Soil Salinity
By Eli Feinerman and Dan Yaron
10. A Model for the Analysis of Seasonal Aspects of Water Quality 125
Control
By Dan Yaron
11. Treatment Optimization of Municipal Wastewater and Reuse 143
for Regional Irrigation
By Ariel Dinar and Dan Yaron
12. Evaluating Cooperative Game Theory in Water Resources 165
By Ariel Dinar, Aaron Ratner and Dan Yaron
viii
13. Adoption and Abandonment ofIrrigation Technologies 183
By Ariel Dinar and Dan Yaron
14. An Approach to the Problem of Water Allocation to Israel and 201
the Palestinian Entity
By Dan Yaron
15. Placing Dan Yaron's Work in the Literature 219
By David Zilberman and Ariel Dinar
Appendix: Dan Yaron's Graduate Students 227
Index 231
LIST OF FIGURES
2.1 A schematical map ofIsrael and the core elements of its water system 19
3.1 Estimated relationship between water quantity and sorghum grain yield, using 24
the formula y = bo + bjx2 + b2x22
3.2 Estimated relationship between water quantity and sorghum grain yield, using 25
the formula y = bo + bjx2 + b2x23
4.1 Typical moisture fluctuation in a given soil layer 37
4.2 Estimated soil moisture variation curve and observed moisture points for wheat 44
variety FA, treatment T6, in year 1968/1969, layer 1 (0-30 cm)
5.1 A hypothetical iso-soil-salinity curve and determination of the optimal 54
quantity-salinity concentration combination
5.2 An iso-soil-salinity curve Xij :<;; meq CIII derived with the aid of the linear 60
programming model
7.1 Net irrigation water requirement as a function of time during the irrigation 83
season for five levels of initial soil salinity and four levels of salinity of
irrigation water
7.2 Net income, crop yield, and net irrigation water quantities, as a function of 84
initial soil salinity for four levels of water salinity
9.1 The response function 107
9.2 The estimated response function of potatoes 111
9.3 Quantity of leaching water (Q) as a function of the target soil salinity (S) 114
-
(initial soil salinity S = 20 meq ClII)
12.1 Income transformation curves between Farm 1 and 2 (Scenarios 3 and 4) 173
12.2 The core of the three farms cooperative game in the NTU situation 176
13.1 Scheme for the estimation procedure of the technology cycle 187
13.2 Observed, simulated and estimated values for the diffusion of drag-line 188
sprinklers in Hadera region
13.3 Effect of subsidy for irrigation equipment on the diffusion of drip 196
13.4 Substitution between water price and subsidy for irrigation equipment in order 197
to reach the ceiling of the diffusion process for drip at year 2000
14.1 Income efficiency frontier: Israel and the Palestinian Entity 213
LIST OF TABLES
2.1 Water potential from natural sources, excluding Gaza and South Jordan Valley 10
2.2 Urban water use and residual for agriculture from natural sources 11
2.3 Cost of water from various sources 13
2.4 Deviation from water quotas 17
2.5 Profit as a percentage of outlays in 1989 to 1990
3.1 Least-squares estimate ofy (sorghum fiber yield kgldunam) as a function Ofx2 23
(effective quantity of water applied m3/dunam), using two alternative formula
4.1 Details on irrigation treatments of wheat in 4 years of experimentation, 1965- 38
1966 to 1968-1969, at the Gilat Experiment Station
4.2 Empirical estimates of the parameters aij and bij for the FA wheat variety 42
grown in 1967/1968 using the function ETij = aij+ bijwij
4.3 Mean values of absolute relative deviations for the FA wheat variety in 43
1967/1968
4.4 Seasonal means of the absolute value of the relative deviations D for all 45
varieties and years
4.5 Expected values of water use, yield of wheat, and net return per unit area of 48
land under selected irrigation policies based on computed soil moisture
depletion values at time of irrigation
4.6 Comparison of estimated net returns per unit area of land (ILIdunam) under 49
policies 5 and 14 in years of low rainfall
5.1 Empirical estimates of marginal and average rates of substitution of water 59
salinity for quantity
6.1 Annual expected steady state monetary losses due to soil and water salinity 68
6.2 Corresponding values for a range of water quality 69
7.1 The estimated parameters (lit, bt) of the Gilat experiments 79
8.1 Subdivision of the irrigation season 93
8.2 Water constraints and initial cotton irrigation activities 96
8.3 Generation of new irrigation activities and shadow prices' of water of the LP- 99
DP consecutive loop
8.4 Hectares of cotton at consecutive LP solutions 101
9.1 Relationships between average soil salinity (S;) and potato yieldO(Y;}-the 110
Negev area
9.2 Expected value of sample information [EVSI(n)] for the three alternative 119
observations spreads
10.1 Relative monthly flows with respect to an "average month" for several Illinois 127
rivers
10.2 Relative monthly DO concentrations with respect to an "average month" for 127
the Du Page River, Illinois
10.3 Marginal social cost of BOD removal 138
ILl Effluent quality requirement for major crops 145
11.2 Basic data for representative crops 155
11.3 Farms' major water and land characteristics 156
xii
11.4 Cost, gross income, and shadow prices of freshwater under the optimal 157
noncooperative solution
11.5 Comparison of major results in the regional optimization solution at different 158
subsidy levels /
11.6 Average treatment and conveying costs in a "Grand Coalition" cooperative 159
setting
11.7 Land use and cropping patterns under the noncooperative and cooperative 160
situations
11. 8 Use of water under the noncooperative and cooperative situations 161
12.1 Income of players in the optimal regional solutions for different coalition 168
combinations, the value for the different coalitions, and the incremental
income values before redistribution
12.2 Extreme points of the core in the regional game (case study I) 169
12.3 Distribution of the incremental income among participants in the regional 170
cooperation according to alternative allocation schemes (case study I)
12.4 Nash-Harsanyi solution for a three-farm cooperative with reference to scenario 175
4 (case study II)
13.1 Characteristics of sample citrus farms, 1987, by region 191
13.2 Plantation and adoption periods for irrigation technologies in different regions 191
in the sample
13.3 Estimated irrigation technology cycles (years) 193
13.4 Estimated logistic quadratic diffusion and abandonment curves for 194
technologies being abandoned, by regions
13.5 Logistical curves of the diffusion of several modem irrigation technologies 195
(corrected for serial correlation)
14.1 Projected water supply potential from natural sources (fresh and brackish) and 202
projected use in Israel in the years 2000 and 2010
14.2 Water supply potential of the Mountain Aquifer 204
14.3 Population and water requirements projections for the West Bank and the Gaza 204
Strip for the year 2000 according to Awartani (1990)
14.4 Water inputs and yields in the traditional and the modernization project 205
14.5 Quantity of water per ton of product (m3/ton) 207