Drought and Groundwater Management

Arbeitspapier

This paper considers the problem of a water management authority faced with the threat of a drought that hits at an uncertain date. Three management policies are investigated: i) a laissez-faire (open-access) policy of automatic adjustment through a zero marginal private net benefit condition, ii) a policy of optimal dynamic management ignoring the threat of the drought and relying on automatic adjustments through a zero marginal social net benefit condition, iii) an economically optimal dynamic policy taking account of the threat of a drought. In particular, we show that the optimal pre-drought steady-state equilibrium stock size of water under policy iii) is smaller than under policy ii) and, hence, a precautionary stock size should not be built up prior to the drought.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 5968

Classification and Topics

• Classification: Wirtschaft ; Renewable Resources and Conservation: General ; Renewable Resources and Conservation: Fishery; Aquaculture
• Subject: drought ; groundwater management ; uncertainty

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Amundsen, Eirik S. ; Jensen, Frank
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/145003
• Last update: 10.03.2025, 11:42 AM CET