The fundamental problem for any scheme of water management that tries to maximisewelfare across a river system is that of determining the optimal allocation at everypoint. The problem cannot, in general, be avoided by trading water rights because theprice will not account for the effect of extraction at any one point on all other points.This article interprets the problem in terms of the indeterminacy that results frommissing information on the value of water at internal junctions between rivers. It isthen solved in an optimal control theory framework.
|Journal||The Australian Journal of Agricultural and Resource Economics|
|Publication status||Published - 2009|