This report examines the likely effects of additional agricultural water rights under the ColumbiaRiver Initiative (CRI) on net crop revenues (hay, orchards, vegetables, potatoes, wheat, and othercrops) in the state of Washington over the next 20 years. This study corrects for four potentiallyserious methodological flaws made in two previous studies associated with the CRI andconcludes that those studies substantially overestimated the net revenues accruing to producers inthe Columbia River area from new irrigated acreage under the CRI.

We propose a theoretical framework to analyze the conditions under which a farmer facing production uncertainty (due to a possible water shortage) and incomplete information will adopt a more efficient irrigation technology. A reduced form of this model is empirically estimated using a sample of 265 farms located in Crete, Greece. The empirical results suggest that farmers choose to adopt the new technology in order to hedge against production risk.

Perth, Western Australia (pop. 1.6m) derives 60% of its public water supply from the Gnangara groundwater system (GGS). Horticulture, domestic self-supply, and municipal parks are other major consumers of GGS groundwater. The system supports important wetlands and groundwater-dependent ecosystems. Underlying approximately 2200km² of the Swan Coastal Plain, the GGS comprises several aquifer levels with partial interconnectivity. Supplies of GGS groundwater are under unprecedented stress, due to reduced recharge and increases in extraction.

Water rights markets in the western United States have expanded over the last 40 years, as a result of population growth in the West and Southwest, and limited development of new storage. Until 2008, house prices, home construction and population growth appeared to be locked in an ever-increasing upward trend. With little historical experience to the contrary, water right market prices similarly appeared to be driven by real estate development.