The value of agricultural water rights in agricultural properties in the path of development

James Yoo, Silvio Simonit, John P. Connors, Paul J. Maliszewski, Ann Kinzig, Charles Perrings

Research output: Contribution to journalArticle

10 Scopus citations

Abstract

This paper estimates the value of water rights in a rapidly urbanizing semi-arid area: Phoenix, Arizona. To do this we use hedonic pricing to explore the impact of water rights on property values in 151 agricultural land transactions that occurred between 2001 and 2005. We test two main hypotheses: (1) that the marginal willingness to pay for water rights is higher in more developed urbanizing areas than in less developed rural areas, and (2) that the marginal willingness to pay for water rights in urban areas is increasing in the value of developed land. We find that the marginal willingness to pay for water rights is highest among properties in urbanized or urbanizing areas where a significant proportion of the land has already been developed. Additionally, we find that the marginal willingness to pay for agricultural water rights is greatest in cities where developed land is most valuable.

Original languageEnglish (US)
Pages (from-to)57-68
Number of pages12
JournalEcological Economics
Volume91
DOIs
StatePublished - Jul 1 2013

Keywords

  • Elasticity
  • Farmland prices
  • Hedonic price method
  • Marginal-willingness-to pay
  • Urbanization
  • Water rights

ASJC Scopus subject areas

  • Environmental Science(all)
  • Economics and Econometrics

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