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Publication Detailed Description
Journal Title
Australian Journal of Agricultural and Resource Economics
Year (definitive publication)
2019
Language
English
Country
United States of America
More Information
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Abstract
Downside risk, which refers to deviations below a threshold, is often important in
water management decisions, especially in areas with large and skewed variations in
precipitation patterns. In this paper, we present a model for a reservoir manager who
is downside risk averse and who performs a dynamic allocation of irrigation water,
taking into account the negative effects of droughts on farm profits and different
environmental constraints. We analyse the water stock, flows and agricultural profits
for alternative environmental restrictions and thresholds for irrigation levels and find
that stricter environmental constraints increase total water supply and carryover
stock, while higher penalty thresholds lead to their overall decrease. Furthermore,
increasing penalty thresholds leads to a higher emphasis on avoiding shortages, at the
expense of lower average profits.
Acknowledgements
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Keywords
Environemental constraints,Lower partial moments,One-side measures,Water inflow variability
Fields of Science and Technology Classification
- Economics and Business - Social Sciences
Funding Records
| Funding Reference | Funding Entity |
|---|---|
| UID/GES/00315/2013 | Fundação para a Ciência e a Tecnologia |
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