The Gravity of Water: Water Trade Frictions in California. (1st October 2016)
- Record Type:
- Journal Article
- Title:
- The Gravity of Water: Water Trade Frictions in California. (1st October 2016)
- Main Title:
- The Gravity of Water: Water Trade Frictions in California
- Authors:
- Regnacq, Charles
Dinar, Ariel
Hanak, Ellen - Abstract:
- Abstract: It is relatively well accepted that costs associated with transfers weigh upon water markets and deter some exchanges. But few studies explicitly address such costs and their impacts on trading behavior. In this article we fill this gap, using a tool from the international trade literature called the gravity equation. We first develop a theoretical model to assess the micro‐foundation of this approach in a water market context. The model distinguishes between variable and fixed costs of trade, which allows us to disentangle the decision to enter into the water market (extensive margin) and the decision on the quantity of water to be transferred (intensive margin). We then test the theoretical predictions using water transfer data among California water districts over a 17‐year period. We approximate transfer costs by distance and institutional factors. Results validate the theoretical predictions and show the importance of distance and institutional impediments in the decision to trade.
- Is Part Of:
- American journal of agricultural economics. Volume 98:Number 5(2016)
- Journal:
- American journal of agricultural economics
- Issue:
- Volume 98:Number 5(2016)
- Issue Display:
- Volume 98, Issue 5 (2016)
- Year:
- 2016
- Volume:
- 98
- Issue:
- 5
- Issue Sort Value:
- 2016-0098-0005-0000
- Page Start:
- 1273
- Page End:
- 1294
- Publication Date:
- 2016-10-01
- Subjects:
- Water markets -- gravity equation -- transaction costs
Agriculture -- Economic aspects -- Periodicals
Agriculture -- Periodicals
338.105 - Journal URLs:
- http://ajae.oxfordjournals.org/ ↗
https://academic.oup.com/ajae ↗
https://onlinelibrary.wiley.com/journal/14678276 ↗
http://ukcatalogue.oup.com/ ↗ - DOI:
- 10.1093/ajae/aaw051 ↗
- Languages:
- English
- ISSNs:
- 0002-9092
- Deposit Type:
- Legaldeposit
- View Content:
- Available online (eLD content is only available in our Reading Rooms) ↗
- Physical Locations:
- British Library DSC - 0820.950000
British Library DSC - BLDSS-3PM
British Library HMNTS - ELD Digital store - Ingest File:
- 17210.xml