Determination of economic value of water and its demand function production for alfalfa crop in kurdistan province (Case study: Dehgalan plain)

Subject Areas : Agricultural Economics Research

hamed ghaderzadeh ¹ (A faculty member at the University of Kurdistanاستادیار اقتصاد کشاورزی دانشگاه کردستان.)
azadeh jazayeri ² (university of kurdistanکارشناس ارشد اقتصاد کشاورزی دانشگاه کردستان.)

Received: 2016-01-26 Accepted : 2018-07-18 Published : 2018-09-23

Keywords: Dehgolan plain, water demand, Economic value of water, the price elasticity of demand,

Abstract :

The necessary data were obtained through questionnaires from 110 farmer in the Dehgolan plain during 2013-2014. The results showed that, after estimating the flexible and inflexible due to econometric tests, both the Cobb-Douglas function and transcendental functions have been selected as the best functional forms. The Cobb-Douglas function had more preference than transcendental function using constrained least squares test. the value of the marginal product of water per cubic meter based on the Cobb-Douglas production function and Transcendental function were equal to 1689 and 1093 Rials respectively.The final cost per cubic meter of irrigation water was 625 Rials. The difference between the economic value and the final cost of water, can be one of the reasons for the excessive consumption and lack of water savings in the production of hay.The self- price elasticity of water demand is equal to -2.72 which indicated that, the demand elasticity of this input toward the changes in the price of water. Therefore, the use of pricing policies may will be an appropriate economic instrument to reduce the water consumption.

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