Water Resources Modeling: A Review

Australian economists were modeling irrigation water scenarios many years before substantial reforms started taking effect. Early modelers recommended that the water authorities raise the price of irrigation water. A recurring theme of later modeling is that water trading plays an important role in improving allocative efficiency. The eventual COAG reforms included the separation of land and water titles. With this separation, water trading became easier. With such trading, the market rather than authorities determine the price of water. Modeling has shown that other institutional aspects of water management have also hindered optimal water allocations in the past.