Determining the Economic Valuation of Agricultural Water in Ardakan- Yazd Plain of Yazd Province

Water pricing is one of the important economic tools for water increasing demand management in the agricultural sector. In this study the economic value of agricultural water was calculated by using production function, in plain of Yazd–Ardakan. For this purpose, the required data through questionnaires from farmers producing wheat samples were collected in 1387-1388. After studying the results of different production functions, the generalized Leontief production function was selected as desired production function for wheat crop. The results of estimating water demand function shows that price elasticity of demand is equal to -2, that indicate demand of water is sensitive to water price changes. Therefore, using of pricing policies is an economic tool for reducing water use. Also, water economic value and water unit price per cubic meter were calculated 997.5 and 530,8 rials, respectively. The difference between economic value and unit price of water can be one of the reasons of excessive and unefficiency water use in wheat production.

JEL Classification: C21, D24, N44


Keywords:
Water, Prod‌uction Function, Demand Function, Price Elasticity of Water Demand, Productivity, Water Valuation