Document Type

Dissertation

Date of Degree

Summer 2010

Degree Name

PhD (Doctor of Philosophy)

Degree In

Economics

First Advisor

Harry J. Paarsch

Second Advisor

Srihari Govindan

Abstract

In the first chapter, I consider the institutional structures as well as the doctrines typically encountered in the surface water sector. To investigate the sources and methods of government support in the water sector, I categorize different sorts of government support according to the location of water along the water cycle. I conclude the section with examples of observed water markets.

In the second chapter, I consider the problem of water usage, developing a model to analyze the optimal pricing of water within a second-best economy. As a water supplier, the local government may price discriminate across consumers and farmers. I introduce the second-best pricing scheme, derive conditions for the marginal-cost pricing and inverse-elasticity rules, and analyze when the government optimally deviates from these two pricing schemes.

In the third chapter, I provide an analysis of the data I collected from Turkey. First, I examine the data on reservoir flows, including service share and fixed costs of the reservoirs. Then, I provide details about the relationship between the quantity and price of irrigation and of tap water.

Finally, in the fourth chapter, I apply the theoretical framework to the data from Turkey. In Turkey, the current water-pricing policy is dictated by the sole objective of breaking-even in each period. This results in large withdrawals, which is not sustainable in the long-run, hence not optimal. I analyze the dynamic optimal water resource management problem of a benevolent government. I compare the implications of the current and the optimal pricing policies.

Keywords

DYNAMIC PROGRAMMING, IRRIGATION, RAMSEY PRICING, TAP WATER, WATER PRICING, WATER SCARCITY

Pages

vii, 108

Bibliography

105-108

Comments

This thesis has been optimized for improved web viewing. If you require the original version, contact the University Archives at the University of Iowa: http://www.lib.uiowa.edu/sc/contact/.

Copyright

Copyright 2010 Yiğit Sağlam

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Economics Commons

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