Pricing For Irrigation Water On
Japanese Paddy-fields: Applicability Of
Stochastic Choice Model
Author(s)
Y. Kunimitsu
Abstract
Water pricing attracts great public interest for efficient water use in the world.
However, there have been few studies to analyze irrigation water value, in
particular with respect to Japanese paddy-fields owing to the difficulty in
achieving a precise measurement for water volume on site. This paper evaluates
the water pricing value in Japanese rice production by a stochastic choice model
similar to the contingent valuation method. The estimation results showed that i)
the derived demand for irrigation water with regard to water pricing value is
inelastic, ii) the water pricing value evaluated by farmers is not high enough to
compensate for the full-costs of the water supply including renewal costs of
irrigation facilities and running costs, and iii) the water pricing value was
affected by rice price and unit harvest of rice production. Therefore, the bidding
price of paddy-field irrigation water can be simulated by the stochastic choice
model, although water pricing policy is not well accepted by farmers in Japan at
present.
Keywords: profit function of rice production, contingent valuation method
(CVM), Logit model, conjoint analysis, price elasticity.
1 Introduction
Water is quite limited and is one of the key resources for sustainable
development of the world. For efficient use, water pricing has been discussed as
an urgent policy issue in the World Water Forum. In the field of economics, Kan
et al. [2], Wang and Lall [9] and Moore [6] analyzed the derived demand of
irrigation water in semi-arid regions based on production and cost functions in
Keywords
profit function of rice production, contingent valuation method(CVM), Logit model, conjoint analysis, price elasticity.
Related Book
Other papers in this volume
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