I posted this question on a list of environmental & resource economists:
Has anyone ever measured the "value of water" in an economy, let alone to an individual?Here are some responses (to be updated)...
I think not, and have written some reasons here.
The literature doesn't seem to be very abundant on the matter (I've just been reviewing it as part of my PhD). Maybe these references can be of some help:BY says:
- Young (2005) Determining the Economic Value of Water, Concepts and Methods. RFF.
- Aylward, Seely, Hartwell and Dengel (2010) The Economic Value of Water for Agricultural, Domestic and Industrial Uses : A Global Compilation of Economic Studies and Market Prices. Ecosystem Economics.
Your question sounds deceptively simple, but there are uncontroversial reasons why, for "an economy" it is difficult to measure the value of water. First of all, you appear to mean net benefit from water rather than the marginal value. If so, then net benefit is infinite since life cannot exist without water. If you mean marginal value of water, then it varies enormously across space and time. I have measured the marginal value of water in agriculture in Oregon, and it varies by a factor of 10 or 20 from parcel to parcel and week to week during the growing season.RH says:
This has to do with the nature of water itself, and the ambiguity in your question about "value."
Check these out:
- A few chapters in: Lange and Hassan (eds.) (2006). The Economics of Water Management in Southern Africa: An Environmental Accounting Approach. Edward Elgar, UK.
- Hassan and Thurlow (2011). Macro–micro feedback links of water management in South Africa: CGE analyses of selected policy regimes, Agricultural Economics 42(2):235-247
- Hassan and Farolfi (2005). Water value, resource rent recovery and economic welfare cost of environmental protection: a water sector model for the Steelpoort sub-basin in South Africa, Water SA 31(1): 9-18.