nep-res New Economics Papers
on Resource Economics
Issue of 2005‒07‒25
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Chinatown: Transaction Costs in Water Rights Exchanges. The Owens Valley Transfer to Los Angeles. By Gary D. Libecap
  2. Second-Best Pollution Taxation and Environmental Quality By Thomas Gaube
  3. The Role of Rivalry. Public Goods versus Common-Pool Resources By Frank P. Maier-Rigaud; Jose Apesteguia

  1. By: Gary D. Libecap
    Abstract: I re-examine the notorious Owens Valley water transfer to Los Angeles, which is a pivotal episode in the political economy of contemporary western water allocation. Negotiated between 1905 and 1935, it remains one of the largest voluntary water sales in U.S. history. It made the growth of semi-arid Los Angeles possible, increasing the city’s water supply by over 4 times. Water rights were bundled with the land so that the Los Angeles Water Board had to purchase nearly 1,000 small farms. The negotiations between property owners and the agency were complicated. There often were lengthy disputes over farm characteristics, amounts of water conveyed, and valuation of both land and water. Bilateral monopoly emerged between sellers’ pools and the Board. During bargaining impasses, the aqueduct was periodically dynamited. Today, the outcome of the Owens Valley water exchange is viewed as very one sided--one of “theft” by Los Angeles. As such, it discourages contemporary transfers of water from agricultural to urban areas. Using new qualitative and quantitative evidence, especially for 1924-34, when most water-bearing land was purchased, I examine the sources of bargaining conflicts, the timing of sales, the distribution of the gains from trade, and offer a new assessment of the results of the transfer. Implications for current water rights negotiations are drawn.
    Date: 2005–06
    URL: http://d.repec.org/n?u=RePEc:icr:wpicer:16-2005&r=res
  2. By: Thomas Gaube (Max Planck Institute for Research on Collective Goods, Bonn, Germany)
    Abstract: This paper deals with second-best pollution taxation by investigating allocations instead of the corresponding tax rates. Assuming certain restrictions on utility and that the marginal revenue from environmental taxation is positive, it is shown that environmental quality is higher in second best where only distortionary taxes are used to finance public expenditures than in the first-best optimum where lump-sum taxes are available.
    Keywords: environmental taxation, public goods
    JEL: H21 H41
    Date: 2005–04
    URL: http://d.repec.org/n?u=RePEc:mpg:wpaper:2005_9&r=res
  3. By: Frank P. Maier-Rigaud (Max Planck Institute for Research on Collective Goods, Bonn, Germany); Jose Apesteguia
    Abstract: Despite a large theoretical and empirical literature on public goods and common-pool resources, a systematic comparison of these two types of social dilemmas is lacking. In fact, there is considerable confusion about these two types of dilemma situations. As a result, they are often treated alike. In this paper we argue that the degree of rivalry is the fundamental difference between the two games. We show that rivalry implies that both games cannot be represented by the same game theoretic structure. Fur-thermore, we experimentally study behavior in a quadratic public good and a quadratic common-pool resource game with identical Pareto opti-mum but divergent interior Nash equilibria. The results show that partici-pants clearly perceive the differences in rivalry. Aggregate behavior in both games starts relatively close to Pareto efficiency and converges to the respective Nash equilibrium.
    URL: http://d.repec.org/n?u=RePEc:mpg:wpaper:2004_2&r=res

This nep-res issue is ©2005 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.