Agent-based modeling simulates irrigation water trading under drought to evaluate efficient agricultural water market designs.
This research highlight describes the development of an agent-based model designed to simulate irrigation water-rights trading under drought conditions in agricultural watersheds. The model represents farmers and water-right holders as “agents” whose behaviors and decisions influence water leasing and trading outcomes. By simulating these interactions, researchers can compare different water market structures and assess their potential impacts on economic efficiency and drought resilience.
The model incorporates farm characteristics, water-right seniority, spatial constraints within river networks, and regulatory rules governing water transfers. It also simulates behavioral factors such as preferences for maintaining active farming rather than leasing water rights. The system evaluates alternative trading scenarios, including bilateral transactions and “smart markets” that match buyers and sellers to maximize gains from trade.
Results suggest that market participation and economic benefits vary with drought severity and market structure. The modeling framework provides a tool for researchers and policymakers to evaluate water allocation strategies and improve the effectiveness of water markets in regions governed by prior appropriation water rights systems.
This work was supported by the U.S. Department of Agriculture National Institute of Food and Agriculture (project #1016467).
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Authors
Basu, R. and Yoder, J.
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Suggested Citation
Basu, R., Yoder, J. 2023. An Agent-Based Model for Assessing Agricultural Water Market Structure and Function. Washington State University Water Research Center.
Year Published
2024
Areas of Focus
Agricultural Technology and Water Resources & Policy
Topics
Climate Change, Production Systems, and Water Resources
