Journal
EUROPEAN REVIEW OF AGRICULTURAL ECONOMICS
Volume 42, Issue 1, Pages 1-24Publisher
OXFORD UNIV PRESS
DOI: 10.1093/erae/jbu003
Keywords
Australia; irrigation water; risk aversion; water market
Categories
Funding
- Australian Government (Department of Climate Change and Energy Efficiency)
- National Climate Change Adaptation Research Facility (NCCARF)
Ask authors/readers for more resources
In this article, the role of water markets in helping farmers manage the risk of water shortage is studied. Using farm survey data from Australia's southern Murray-Darling Basin, one of the most active water markets in the world, we tested the relationship between farmers' exposure to risk and their decisions to purchase and sell water allocations (temporary water) on the market. Farmers experiencing higher variability in profit and facing more downside risk purchased greater volumes of water allocations in general. Purchasing water allocations on the market is found to be a risk-reducing strategy, in particular for farmers in the horticultural sector. There is only very weak evidence to support the notion that selling water allocations is associated with reduced risk exposure.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available