Economic aspects of appropriative water rights

In the and portion of the western U.S., economic development has been affected by the doctrine of appropriative water rights. This paper considers the efficiency aspects of the appropriative doctrine for the case of a stochastic and uncontrolled river, then, subsequently, extends the analysis to the case where the presence of an upstream storage facility provides some degree of flexibility in determining releases. Lastly, the effects of institutions which limit the degree of river use and the implicit release policies attendant are considered.