Estimating the Value of Water Use Permits: A Hedonic Approach Applied to Farmland in the Southeastern Us

38 Pages Posted: 19 Apr 2006

See all articles by Ragan Petrie

Ragan Petrie

Texas A&M University - Department of Economics; University of Melbourne - Melbourne Institute of Applied Economic and Social Research

Laura O. Taylor

Georgia State University - Department of Economics

Date Written: April 2006

Abstract

In the State of Georgia, any agricultural producer who wishes to pump more than 100,000 gallons of water a day for crop irrigation is required to have an irrigation permit. The permit stays with the land and in the event of sale the permit is transferred with the property. Until recently, permits were essentially granted freely to all applicants in the Flint River water basin, without limit. In 1999, however, with increasing demand for water from growing urban Atlanta and several years of drought in the Southeast, the state of Georgia placed a moratorium on the issuance of agricultural water permits in the Flint River basin. This research exploits this policy change within a hedonic pricing framework to estimate the value of irrigation rights in the Southeast US. While the value of irrigation rights has been studied extensively in the western US, differences in property rights and legal regimes, as well as a lack of established water-rights markets in the East, leave us with little information regarding the value of irrigation rights in this setting.

Suggested Citation

Petrie, Ragan and Taylor, Laura O., Estimating the Value of Water Use Permits: A Hedonic Approach Applied to Farmland in the Southeastern Us (April 2006). Andrew Young School of Policy Studies Research Paper No. 06-45. Available at SSRN: https://ssrn.com/abstract=897543 or http://dx.doi.org/10.2139/ssrn.897543

Ragan Petrie (Contact Author)

Texas A&M University - Department of Economics ( email )

4228 TAMU
College Station, TX 77843-4228
United States

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

Laura O. Taylor

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

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