State Water Resources Research Institute Program
Project ID: 2007ID78B
Title: A spreadsheet tool to derive economic demand for irrigation water from crop price, evapotranspiration/yield relationships and irrigation application efficiency
Project Type: Information Transfer
Start Date: 3/01/2007
End Date: 2/29/2008
Congressional District: 01 & 02
Focus Categories: Economics, Water Supply, Irrigation
Keywords: Water demand functions, water production functions, evapotranspiration production functions, irrigation application efficiency, price of irrigation water, water economics
Principal Investigators: Contor, Bryce; Allen, Richard; Taylor, Garth
Federal Funds: $ 10,969
Non-Federal Matching Funds: $ 22,591
Abstract: Because most water supplies in the US west are fully allocated, water for new demands (including potable water supplies) must come from reallocation of existing supplies. Economic studies of potential reallocation mechanisms and the economic impact of reallocation require knowledge of the economic demand for irrigation water.
Demand functions may be derived from production functions and prices of outputs. Applied-water production functions can be derived experimentally but field experiments are costly and the results are site-specific. Water-production functions can also be based on crop-process models such as EPIC but these models are data-intensive and the results are also site-specific.
Evapotranspiration (ET) production functions are theoretically site-independent, and this is confirmed by comparison of experimentally-derived ET production functions from various locations. Simple and easily-applied methods for deriving ET production functions exist and are frequently cited in the literature.
Applied-water production functions can be derived from ET production functions by the simple relationship (applied water = (ET - Pe)/irrigation application efficiency), where Pe is the depth of precipitation effective in satisfying ET demand. Irrigation application efficiency has been widely studied and can be estimated for a given location and irrigation condition.
The proposed project is an information-transfer project to construct a tool to incorporate existing ET production functions and applied-water application efficiency calculations with crop prices to derive local demand functions for irrigation water, without costly field experiments or extensive data collection.
The method employed will be to manipulate the equations for ET production functions and applied-water efficiency to obtain a single equation for water production function, and to program this into the spreadsheet. Multiplying production times price yields the revenue, and the derivative of revenue with respect to water input is the production-value-based demand for irrigation water.
Objectives are to produce: a) An assemblage of known and tested ET-yield relationships; b) A functional spreadsheet tool; c) Project documentation and users' manual; and d) A peer-reviewed journal article. The primary product will be the spreadsheet that users may populate with local prices and parameters for the ET production functions and efficiency calculations. The output of the spreadsheet will be a table and charts that predict yield, gross revenue and demand across a reasonable range of depth of irrigation water application.
Progress/Completion Report, PDF