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Estimating irrigation water demand in the Moroccan Drâa Valley using contingent valuation

Storm, Hugo, Heckelei, Thomas, Heidecke, Claudia
Journal of environmental management 2011 v.92 no.10 pp. 2803-2809
agricultural management, contingent valuation, cost benefit analysis, demand functions, farmers, groundwater, heteroskedasticity, irrigation management, irrigation water, livelihood, models, surface water, surveys, valleys, water allocation, water analysis, water policy, water supply, willingness to pay, Morocco
Irrigation water management is crucial for agricultural production and livelihood security in Morocco as in many other parts of the world. For the implementation of an effective water management, knowledge about farmers’ demand for irrigation water is crucial to assess reactions to water pricing policy, to establish a cost-benefit analysis of water supply investments or to determine the optimal water allocation between different users. Previously used econometric methods providing this information often have prohibitive data requirements. In this paper, the Contingent Valuation Method (CVM) is adjusted to derive a demand function for irrigation water along farmers’ willingness to pay for one additional unit of surface water or groundwater. An application in the Middle Drâa Valley in Morocco shows that the method provides reasonable results in an environment with limited data availability. For analysing the censored survey data, the Least Absolute Deviation estimator was found to be a more suitable alternative to the Tobit model as errors are heteroscedastic and non-normally distributed. The adjusted CVM to derive demand functions is especially attractive for water scarce countries under limited data availability.