Journals Information
Environment and Ecology Research Vol. 10(2), pp. 225 - 237
DOI: 10.13189/eer.2022.100212
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An Exchange Market of Water Rights for Irrigation in Tunisia: Case of Asymmetric Information on Water Quality
Intissar Askri *
LAMIDED Research Center, Faculty of Economics and Management of Sousse, Tunisia
ABSTRACT
Tunisia, due to its location between the Mediterranean and the Sahara, is an arid country on most of its territory. Indeed, there is a marked difference between the availability of water in the North of the country and its use for irrigation in the Center. This difference, combined with the variability of the Mediterranean climate, makes water resources scarce and unequally distributed in time and space. These problems led me to search for an alternative that reduces water consumption. The present paper heads towards the creation of markets for irrigation water rights in asymmetric information on the quality of this resource to minimize water consumption. Since important consequences result from the asymmetry of information in a water market, in the case where one of the parties in a market (buyer or seller) has more information than those of the other side. The purpose of this work is therefore to consider the exchange market of water rights to measure the economic efficiency of water markets on the one hand in the presence of total asymmetry of information on water quality and on the other hand in the presence of variable costs of information. And then to see what better strategy can reduce water consumption during years of scarcity. In response, we proposed to conduct a laboratory experiment (we used 8 sessions included 32 exchange periods), to test a variety of auction treatments and to measure the impact of unequal distribution of the cost of information on water quality between the different users (buyers and sellers). Results show that small changes in the distribution of information can have a large and considerable impact on the economy. The higher the information cost, the lower the number of high-quality permits sold, and thus the lower the efficiency of the market. Thus, it can be concluded that the high responsiveness of the demand for information on the quality of the resource suggests that pricing policies can be a potential instrument to minimize water consumption.
KEYWORDS
Auction, Asymmetric Information, Irrigation, Water Quality, Price, Field Experiments
Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Intissar Askri , "An Exchange Market of Water Rights for Irrigation in Tunisia: Case of Asymmetric Information on Water Quality," Environment and Ecology Research, Vol. 10, No. 2, pp. 225 - 237, 2022. DOI: 10.13189/eer.2022.100212.
(b). APA Format:
Intissar Askri (2022). An Exchange Market of Water Rights for Irrigation in Tunisia: Case of Asymmetric Information on Water Quality. Environment and Ecology Research, 10(2), 225 - 237. DOI: 10.13189/eer.2022.100212.