The Use of Pricing and Markets for Water Allocation

The complexity of water and its crucial value to society make the design of management and pricing rules that are simple, transparent, efficient and equitable a formidable task. This paper provides an economic perspective for determining water allocation rules and pricing. First we will present a general framework for the pricing of water. Then we will discuss the issues of water reform that will allow better use of water pricing and finally, we will address some of the particular issues associated with water pricing and allocation in the municipal, agricultural and environmental sectors. View Document.