How Well Do U.S. Western Water Markets Convey Economic Information?

Renata Rimsaite, Karen Fisher-Vanden, Sheila Olmstead, Danielle S. Grogan

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

An efficient market implies that potential gains from trade are fully captured. Achieving this requires a well-functioning market where prices reflect all available information. In the case of water rights markets, this implies that the permanent water rights transfer price reflects the sum of discounted returns to this asset (i.e., the lease price), the market interest rate, and a risk premium that reflects potential future water scarcity. The purpose of this study is to assess the efficiency of western U.S. water markets by using the asset pricing model to measure how well prices reflect long-run returns to permanent water rights. (JEL Q21, Q25)

Original languageEnglish (US)
Pages (from-to)1-16
Number of pages16
JournalLand Economics
Volume97
Issue number1
DOIs
StatePublished - Feb 2021

All Science Journal Classification (ASJC) codes

  • Environmental Science (miscellaneous)
  • Economics and Econometrics

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