ISBN: 2921479265 9782921479264

Category: Unavailable

Page count: 21

We study the optimal valuation of groundwater under different assumptions as to the evolution of the population. In the case of a population that is either constant or decreasing, the optimal consumption path always involves depletion of the ground water stock without ever replenishing. With an increasing population however, it may involve refraining at times from consuming the totality of the surface water flow in order to restock in groundwater for future consumption. The aquifer then serves as a means to achieve welfare increasing intertemporal tranfers of surface water. Therefore the aquifer itself, as distinct from the stock of water it serves to store, may have value and the marginal valuation of water when groundwater stocks are being upon should, for this reason, differ at times from the marginal valuation when it is drawn strictly from surface water.