A Farmer's Subjective Equilibrium under the Opening of a Water Market

To use water resources efficiently, it becomes necessary to introduce a water market which connects the agricultural sector with the non-agricultural sector. 　In this paper, I will discuss about a farmer's subjective equilibrium associated with water and other resources use, and the efficiency of water and other resources use when a water market is introduced. 　From the standpoint of minimizing social losses associated with water and other resources use, we can say that introduction of a water market is benefitial to society. However, water pricing policies will give big impacts not only on water resources use but on other resources use. Therefore, when we discuss about making a water market, we must pay attention to introducing what kinds of water pricing policies.