Putting a Price on Water: Would Price Disclosure Increase Water Market Participation?

Water markets are one potential strategy for reallocating scarce water supplies among agriculture, municipal uses, and environmental needs as climate change increases pressure on water systems. However, participation in water markets is often limited by a lack of information about the prices at which water rights are bought and sold. This article explores whether price disclosure could help address that barrier.

Washington State University researchers surveyed agricultural water users across four watersheds in Washington state—the Methow, Walla Walla, Okanagan, and Yakima—to understand their perspectives on price transparency in water transactions. Many respondents reported difficulty determining a “fair” price for water rights, and more than one-third indicated that mandatory price disclosure would increase their likelihood of participating in water market transactions. Support for disclosure varied by region but was substantial overall, with 60 percent of respondents indicating they would support a policy requiring disclosure of water transaction prices. The findings highlight the tension between maintaining anonymity in transactions and improving transparency that could help water markets function more effectively. This work was supported by the USDA National Institute of Food and Agriculture, project #1016467.