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

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

doi:10.3368/wple.97.1.050719-0061r

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

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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. Here, 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.

Authors:

Rimsaite, Renata ^[1]; Fisher-Vanden, Karen ^[2]; Olmstead, Sheila ^[3]; Grogan, Danielle S. ^[4]

Univ. of Nebraska, Lincoln, NE (United States)
Pennsylvania State Univ., University Park, PA (United States)
Univ. of Texas, Austin, TX (United States)
Univ. of New Hampshire, Durham, NH (United States)

Publication Date:: Thu Aug 19 00:00:00 EDT 2021

Research Org.:: Pennsylvania State Univ., University Park, PA (United States); Univ. of Nebraska, Lincoln, NE (United States); Univ. of New Hampshire, Durham, NH (United States)

Sponsoring Org.:: USDOE Office of Science (SC)

OSTI Identifier:: 1831115

Grant/Contract Number:: SC0016162

Resource Type:: Accepted Manuscript

Journal Name:: Land Economics

Additional Journal Information:: Journal Volume: 97; Journal Issue: 1; Journal ID: ISSN 0023-7639

Publisher:: University of Wisconsin Press

Country of Publication:: United States

Language:: English

Subject:: 29 ENERGY PLANNING, POLICY, AND ECONOMY; water markets; water leases; water transfers; asset pricing model

Citation Formats


                    Rimsaite, Renata, Fisher-Vanden, Karen, Olmstead, Sheila, and Grogan, Danielle S. How Well Do U.S. Western Water Markets Convey Economic Information?.  United States: N. p., 2021. 
Web.  doi:10.3368/wple.97.1.050719-0061r.

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                    Rimsaite, Renata, Fisher-Vanden, Karen, Olmstead, Sheila, & Grogan, Danielle S. How Well Do U.S. Western Water Markets Convey Economic Information?.  United States.  https://doi.org/10.3368/wple.97.1.050719-0061r

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                    Rimsaite, Renata, Fisher-Vanden, Karen, Olmstead, Sheila, and Grogan, Danielle S. Thu .  
"How Well Do U.S. Western Water Markets Convey Economic Information?".  United States.  https://doi.org/10.3368/wple.97.1.050719-0061r.  https://www.osti.gov/servlets/purl/1831115.

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@article{osti_1831115,

  title        = {How Well Do U.S. Western Water Markets Convey Economic Information?},

  author       = {Rimsaite, Renata and Fisher-Vanden, Karen and Olmstead, Sheila and Grogan, Danielle S.},

  abstractNote = {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. Here, 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.},

  doi          = {10.3368/wple.97.1.050719-0061r},

  journal      = {Land Economics},

  number       = 1,

  volume       = 97,

  place        = {United States},

  year         = {Thu Aug 19 00:00:00 EDT 2021},

  month        = {Thu Aug 19 00:00:00 EDT 2021}

}

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