State-contingent modelling of the Murray Darling Basin: implications for the design of property rights

Questions relating to the allocation and management of risk have played a central role in the development of the National Water Initiative, particularly as it has applied to the Murray-Darling Basin. The central issues of efficiency and equity in allocations are best understood by considering water licenses as bundles of state-contingent claims. The interaction of property rights and uncertainty regarding water flows, production and output prices is modelled using a state-contingent representation of production under uncertainty. The role of technology and investment in the determination of efficient adaptation strategies to manage risks is explored using an illustrative example.


Issue Date:
2006
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/149856
Total Pages:
24
Series Statement:
Murray Darling Program
M06/2




 Record created 2017-04-01, last modified 2017-04-26

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