Alternative irrigation water pricing policies: an Econometric Mathematical Programming Model

Considering the important role of irrigation in the socio-economic development of the Alentejo region in Portugal, this paper aims to assess the economic impact of water pricing in the context of the public irrigation scheme of Odivelas. The methodological framework uses Positive Mathematical Programming (PMP) and, as an alternative, Econometric Mathematical Programming (EMP) based on the estimation of optimality conditions. The model parameters were estimated using the entropy approach and information priors. The models were formulated on the aggregated scale of the irrigated scheme, considering the main regional irrigated crops as well as land, labour, capital and water resources. The main results lead to the conclusions that EMP model performs better than PMP and that under a twopart tariff approach the block pricing scheme is better than the volumetric pricing scheme. Keywords: estimation, entropy, EMP, water management, pricing policy. Considerant le role important de l'irrigation dans le developpement socio-economique de la region de l'Alentejo au Portugal, cet article a pour objectif d'evaluer l'impact economique de la tarification de l'eau dans le perimetre d'irrigation publique d'Odivelas. Le cadre methodologique retenu utilise l''approche de la Programmation mathematique positive (PMP) et comme alternative, la Programmation mathematique econometrique (PME) basee sur l'estimation des conditions d'optimalite. Les parametres du modele ont ete estimes en s'appuyant sur l'approche de l'entropie et de l'information a priori. Les modeles ont ete elabores a l'echelle agregee du perimetre irrigue, compte tenu des principales cultures irriguees dans la region ainsi que des principales ressources, terre, travail, capital et eau. Les principaux resultats amenent a conclure que le modele PME est plus performant que le PMP et que dans une approche tarifaire en deux parties, le systeme de tarification de bloc est a preferer au systeme de tarification volumetrique. Mots-cles: estimation, entropie, PME, gestion de l'eau, politique de tarification.