|Author:||Bourgeon, Jean-Marc ; Easter, K. William ; Smith, Rodney B. W.|
|Book Group Author:||NA|
We examine potential third-party effects arising from trading water from one region (rural) to another (urban). Using labor, water and heterogeneous land, rural agents produce a traded agricultural good and nontraded service good. Absent job market frictions, increased water trading improves per capita regional welfare, but aggregate service income can increase (decrease) while individual land rents decrease (increase). If labor experiences job market frictions, water trading can trigger socially inefficient land fallowing. and a decrease in per capita regional welfare. Simulation results confirm the no-job-market-friction model predictions.
|Journal:||AMERICAN JOURNAL OF AGRICULTURAL ECONOMICS|
|Journal ISO:||Am. J. Agr. Econ.|
job market frictions; regional economics; resource economics; third-party effects; water markets
|Source:||Web of Science|