Valuation of Irrigation Water by the Hedonic Price Method: A Case Study in Chalkidiki,Greece

The design of efficient water allocation systems depends, among other factors, on economic issues and, above all, on a reliable estimate of the economic value of water. In this paper the hedonic price method is utilized to reveal the implicit value of irrigation water by analyzing agricultural land values in Chalkidiki, a typical rural area in Greece. The method was applied to a sample of both irrigated and nonirrigated properties and the value of irrigation water was estimated by disaggregating the total price of each parcel of land, obtained through a local survey. Results show that, apart from typical value attributes, the agricultural characteristics of the land, including irrigation water availability, have a significant influence on land prices.     

Simulation and multicriteria analysis in sustainable coastal planning: the case of aquaculture in Thermaikos Gulf, Greece

Mussel aquaculture in Thermaikos Gulf is facing a great challenge to tackle both institutional and production planning aspects. Local stakeholders are concerned about the future design of an efficient and equitable legal planning framework for the aquaculture, as well as about the improvement of production planning in order to optimize the total economic outcome of mussel activity in the area. The present paper focuses on the assessment of alternative production planning decisions, under the assumption that an efficient and socially acceptable institutional framework is already established. To this end, a case-specific decision-making tool is designed aiming to combine simulation modelling and multicriteria analysis. The main interactions between the environmental and cultivation conditions and the socio-economic parameters of the local aquaculture are specified according to a previous modelling effort concerning the long-line mussel farms of the study area. These interactions are then incorporated into a multicriteria model, which is formulated to handle the decision-making problem of selecting the best alternative planning decisions. This is actually a problem of evaluating and choosing the most promising policy options in terms of local society preferences. An integrated approach is followed, by means of an analytic hierarchy process, aiming at analysing the preferences of local community by determining the weights for a specific set of (sustainability) criteria. The relative importance of these criteria is determined through a questionnaire survey among the local stakeholders. The results from this application show that future planning policies should focus on production techniques, which are likely to enhance the quality of mussel production and, at the same time, to minimize the economic risk associated with the local occurrence of Harmful Algal Bloom events.     

Multicriteria decision-making for efficient water and land resources allocation in irrigated agriculture

The irrational use of water in agriculture is often responsible for several problems concerning the depletion and/or the pollution of water resources. In these cases specific policy measures should be taken to protect water resources from harmful agricultural activities, mitigating at the same time their potential impact on farmers’ welfare. To this end, a multicriteria decision-making model is formulated that aims at allocating efficiently water and land resources in a rural area of Greece, by optimizing a set of important socio-economic and environmental objectives. According to the model’s output, past and current decisions on irrigated agriculture turned out to be oriented towards meeting exclusively the socio-economic objectives. Yet, there are several other possible allocations schemes that could be applied in order to improve the performance of environmental indicators and to contribute to a more sustainable use of natural resources. Moreover, the decision-making model can be further employed to assess a number of additional policy measures in irrigated agriculture. In this framework, the outcome of imposing various water pricing policies was evaluated. The efficiency of these policies was found tightly connected to the elasticity of water demand. Namely, higher elasticity seems to enhance the flexibility in resource allocation and the movement towards environmental objectives. Readers should send their comments on this paper to: BhaskarNath@aol.com within 3 months of publication of this issue.