ENVECON 162 Lecture Notes - Lecture 4: Marginal Product, Profit Maximization, Fixed Cost
4 May 2018
School
Department
Course
Professor
Economics of Water Resources
Spring 2018
Lecture 4: Environmental Quality, Technology Choice and Land Allocation
Agricultural Water Use
Agriculture accounts for most water use worldwide. Irrigation helps increase crop yields
and reduces risks by minimizing the effects of a drought but also comes at a cost.
Important questions to consider regarding agricultural water use:
❖ What determines how much water farmers use to irrigate their farms?
❖ How do farmers decide whether and when to adopt new irrigation technologies?
❖ How does soil quality and water prices affect irrigation decisions?
All of these questions can be addressed using the Caswell-Zilberman model.
Effective Water
irrigation efficiency.
that applied water to the field is not available to the plants due to runoff and evaporation.
Effective water is the portion of applied water that is used by plants and is defined by:
❖
➢ represents the irrigation effectiveness of technology .
➢ is a measure of land quality.
➢ is the amount of applied water.
➢ or is a fraction of .
is a function of land quality and is also indexed by . Why? This is because land
quality which ranges from sandy or clay, slopped or flat, hot-dry or temperate-humid
impacts the fraction of applied water that makes it to plants.
Furthermore, the role of technology is to provide flood, drip and sprinkler irrigation.
Changes in land quality have a different impact on efficiency depending on the technology.
For example, on flat, clay soil, flood irrigation can be quite efficient. Similarly, drip
irrigation is efficient in a wide range
of conditions.
The tradeoff between investing in all of these technologies is the high capital cost required.
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Document Summary
Lecture 4: environmental quality, technology choice and land allocation. Irrigation helps increase crop yields and reduces risks by minimizing the effects of a drought but also comes at a cost. Important questions to consider regarding agricultural water use: All of these questions can be addressed using the caswell-zilberman model. Effective water that applied water to the field is not available to the plants due to runoff and evaporation. Effective water is the portion of applied water that is used by plants and is defined by: The term (cid:498)effective water(cid:499) is a term borrowed from agronomy that helps us understand. Farmers purchase (cid:498)applied water(cid:499) but that is not what plants consume. (cid:4666)(cid:4667) is a function of land quality and is also indexed by . This is because land quality which ranges from sandy or clay, slopped or flat, hot-dry or temperate-humid .
