Policy impacts on agricultural irrigation electricity demand in the Columbia Basin
Accurately estimating the price elasticity of demand for irrigation electricity is important to major electricity suppliers such as the Bonneville Power Administration (BPA) of the Pacific Northwest. The BPA has a revenue maximization objective, and the elasticity of demand is central to its rate setting process. Several studies have attempted to estimate demand for irrigation electricity, but none has explicitly included federal agricultural policy and program variables. Tins paper discusses how agricultural programs may influence farmers' irrigation decisions and thus their demand for irrigation electricity. It suggests that existing programs serve to make farmers more responsive to electricity rate increases than would otherwise be the case. Thus, studies that fail to include them may underestimate the responsiveness of farmers to electricity rate increases.
- OSTI ID:
- 5948118
- Journal Information:
- Water Resources Bulletin; (USA), Vol. 26:1; ISSN 0043-1370
- Country of Publication:
- United States
- Language:
- English
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