Template-Type: ReDIF-Paper 1.0
Author-Name:  Mette Kildegaard Graversen
Author-Name-First: Mette Kildegaard
Author-Name-Last: Graversen
Author-Email: mkg@foi.dk
Author-Workplace-Name: Institute of Food and Resource Economics, University of Copenhagen
Title:  Regulating water extraction in a river basin with upstream-downstream communities
Abstract:  This paper proposes a tax mechanism modelled for water extraction in a river system with upstream and downstream farmers. The tax mechanism is based on the regulator’s own estimation of aggregate extraction and for that reason the tax addresses the problem of asymmetric information. It is demonstrated that the tax mechanism ensures approximately correct marginal extraction incentives for the individual farmer. Consequently, it is concluded that the tax mechanism proposed here has a practical application.
Length:  15 pages
Creation-Date:  2011-01
File-URL: http://okonomi.foi.dk/workingpapers/WPpdf/WP2011/WP_2011_2_regulating_water_extraction.pdf
File-Format: Application/pdf
Number: 2011/2
Classification-JEL: 
Keywords: Water extraction; River system; Tax mechanism; Upstream-downstream users
Handle: RePEc:foi:wpaper:2011_2