By Zachary Donohew
Abstract
This paper addresses water scarcity issues in the American West and examines the allocation of water through the appropriative rights system and the extent markets are used to reallocate water from low- to high-valued uses. The unique physical properties of water make it difficult to bound and measure, which makes defining property rights difficult. Markets are also impeded by disputes over third-party effects due to the interdependencies of water users and complex institutional arrangements that dilute decision-making authority. Analysis of water trading in the western United States indicates that the rate of permanent transfers is increasing over time and urban users are paying higher prices relative to agricultural users.
Founded 30 years ago in Bozeman, Montana, PERC—the Property and Environment Research Center—is the nation’s oldest and largest institute dedicated to improving environmental quality through property rights and markets.
PERC’s publications, each designed to resonate with specific groups, move ideas generated at PERC to broader audiences.
Research is at the heart of PERC's work, with a focus on the question: What is the link between economic growth and environmental quality?
The goal of PERC’s programs is to fully realize the vision of establishing “PERC University,” where scholars, students, policy makers, and others convene to expand the applications of free market environmentalism.
PERC's fellowships share a common goal of exposing new scholars, students, journalists, and policy makers to free market environmentalism, as well as enable scholars already familiar with FME to explore new applications.
PERC continues to publish and present a broad range of research and discussion through podcasts, videos, and other multimedia channels.