EVALUATING DIRECT BENEFIT ESTIMATION PROCEDURES FOR IRRIGATION PROJECTS: A SIMPLIFIED APPROACH

Dennis C. Cory, John Daubert

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

ABSTRACT: An integral part of evaluating the net benefits generated by an existing or proposed irrigation project is the assessment of the associated impacts in commodity markets. Traditionally, these impacts have been measured by either assuming no change in commodity prices and calculating net returns to project farmers, or by allowing commodity prices to fall in accordance with a given elasticity of demand and subtracting commodity production costs from the associated area under the commodity demand curve. In either case, it is implicitly assumed that supply is perfectly inelastic. This article establishes that traditional approaches to measuring direct benefits are biased. Formulae are presented for calculating the maximum absolute and relative error which may result from using these techniques as a function of project size. Direct benefit estimates are then evaluated for three irrigation projects in Nebraska, illustrating how these results can be used to improve project evaluation procedures.

Original languageEnglish (US)
Pages (from-to)1066-1070
Number of pages5
JournalJAWRA Journal of the American Water Resources Association
Volume17
Issue number6
DOIs
StatePublished - Dec 1981

Keywords

  • benefit‐cost analysis
  • economics
  • irrigation projects
  • measurement of direct benefits

ASJC Scopus subject areas

  • Ecology
  • Water Science and Technology
  • Earth-Surface Processes

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