Feasibility Study of Water Market Design with Conditional Evaluation Approach (Case Study: Hashtgerd Plain, Alborz Province)

Document Type : Research Paper


1 Department of Economics, Propagation and Agricultural Education, Science and Research Branch, Islamic Azad University, Tehran, Iran

2 Department of Agricultural Economics, College of Agriculture and Natural Resources, University of Tehran, Karaj, Iran

3 Department of Economics, Propagation and Agricultural Education, Science and Research Branch, Islamic Azad University, Tehran, Iran.


Hashtgerd plain has 56percent of Area of Alborz province and consumes more than 84% of surface water resources and more than 90% of groundwater. It is recognized as one of the most significant agricultural zones that experiences critical crises such as subsidence because of excessive withdrawal of these resources. Consequently, it will be inevitable to manage water resources optimally that establishing the water market as an economic instrument will play a significant role in allocating water resources optimally. The economic value of water input and its demand function was estimated in these areas. The equilibrium price of water input in plain was calculated and compared with the results achieved by valuation calculations using the results of estimating the demand functions and the amount of water supply in this study to examine the probability of developing a water market in Hashtgerd using the positive mathematical planning method and SWAP approach and also the optimal cultivation pattern of the region was estimated, which includes 3divisions.As the result, if there is the required physical infrastructure and the related laws, it will be possible to create a water market among regions in conditions that Nazarabad is the purchaser and Taleghan and Savojbolagh are the sellers of their surplus water resources. The results of examining the possibility of forming an intra-regional water market also show that considering that the enthusiasm to pay in people who have limited resources is more than the obtained equilibrium price and the willingness to receive is lower in people who sell their surplus water resources than the equilibrium price; it will be possible to form a water market among farmers in each city with an equilibrium price equal to 3394 Rials per cubic meter. In this situation, both customers (due to purchasing water cheaper than enthusiasm to pay) and sellers (selling water more expensive than enthusiasm/willing to receive) will benefit from creating the market. However, due to the higher equilibrium price of the economic value of water in the cities of Taleghan and Savojbolagh, there is a possibility of failure of the water market and the transfer of water to other sectors.


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