Irrigation Technology Adoption and Gains from Water Trading Under Asymmetric Information

13 Pages Posted: 21 Apr 2020

See all articles by Chokri Dridi

Chokri Dridi

affiliation not provided to SSRN

Madhu Khanna

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics

Date Written: May 2005

Abstract

We develop a water allocation and irrigation technology adoption model under the prior appropriation doctrine with asymmetric information among heterogeneous farmers and between farmers and water authorities. We find that adverse selection reduces the adoption of modern irrigation technology. We also show that even with asymmetric information, incentives for water trade exist and lead to additional technology adoption with gains to all parties. This suggests that under asymmetric information, a thin secondary market improves the allocation of water resources and induces additional adoption of modern irrigation technologies.

Keywords: asymmetric information, irrigation technology, technology adoption, water trading

Suggested Citation

Dridi, Chokri and Khanna, Madhu, Irrigation Technology Adoption and Gains from Water Trading Under Asymmetric Information (May 2005). American Journal of Agricultural Economics, Vol. 87, Issue 2, pp. 289-301, 2005, Available at SSRN: https://ssrn.com/abstract=3581099 or http://dx.doi.org/10.1111/j.1467-8276.2005.00722.x

Chokri Dridi (Contact Author)

affiliation not provided to SSRN

No Address Available

Madhu Khanna

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics ( email )

1301 W. Gregory Drive
Urbana, IL 61801
United States
217-333-5176 (Phone)
217-333-5502 (Fax)

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