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Price Determination and Efficiency in the Market for South Platte Basin Ditch Company Shares

39 Pages Posted: 5 Sep 2011  

Matthew T. Payne

WestWater Research

Mark Griffin Smith

Colorado College - Department of Economics and Business

Clay Landry

affiliation not provided to SSRN

Date Written: September 5, 2011

Abstract

Water scarcity presents an obstacle to economic development in the western United States. Water right markets promote efficient allocation, helping states to derive the highest possible economic benefit from available resources, and allowing western water supplies to support new development and population growth. However, uncertainty surrounding water right market values threatens the ability of water markets to efficiently allocate water. To address this problem, we employ econometric analysis techniques to estimate the values market participants place on shares of ditch company water rights in Colorado’s South Platte basin. Our analysis demonstrates that ditch company share buyers value proximity, reliability, and flexibility.

Keywords: water markets, water rights, water prices, Colorado

JEL Classification: Q23

Suggested Citation

Payne, Matthew T. and Smith, Mark Griffin and Landry, Clay, Price Determination and Efficiency in the Market for South Platte Basin Ditch Company Shares (September 5, 2011). Available at SSRN: https://ssrn.com/abstract=1922446 or http://dx.doi.org/10.2139/ssrn.1922446

Matthew T. Payne

WestWater Research ( email )

1104 Main Street
Suite 610
Vancouver, WA 98660
United States

Mark Griffin Smith (Contact Author)

Colorado College - Department of Economics and Business ( email )

14 E Cache La Poudre Street
Colorado Springs, CO 80903
United States

Clay Landry

affiliation not provided to SSRN ( email )

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