An Illiquid Market in the Desert: Estimating the Cost of Water Trade Restrictions in Northern Chile / Eric C. Edwards, Oscar Cristi, Gonzalo Edwards, Gary D. Libecap.

Format:

Book

Author/Creator:

Edwards, Eric C.

Contributor:

National Bureau of Economic Research.

Cristi, Oscar.

Edwards, Gonzalo.

Libecap, Gary D.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21869.

NBER working paper series no. w21869

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Illiquid Market in the Desert

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2016.

Summary:

This paper estimates the cost of a policy to restrict water trades to mining firms in northern Chile to protect riparian ecosystems and indigenous agriculture. In response to the policy, mining firms have developed high-cost desalination and pumping facilities to secure adequate water supplies. We develop a methodology and estimate the cost of market transactions that fail to occur due to the policy. Lost trade surplus is estimated at $52 million per year. Without trade restrictions, around 86% of the remaining agricultural water in the region would be transferred to mining.

Notes:

Print version record

January 2016.