Multi-criteria modelling of irrigation water market at basin level: A Spanish case study

This paper develops a multi-criteria methodology to simulate irrigation water markets at basin level. For this purpose it is assumed that irrigators try to optimise personal multi-attribute utility functions via their productive decision making process (crop mix), subject to a set of constraints based upon the structural features of their farms. In this sense, farmers with homogeneous behaviour regarding water use have been grouped, such groups being established as ‘types’ to be considered in the whole water market simulation model. This model calculates the market equilibrium through a solution that maximises aggregate welfare, which is quantified as the sum of the multi-attribute utilities reached by each of the participating agents. This methodology has been empirically applied for the Duero Basin (Northern Spain), finding that the implementation of this economic institution would increase economic efficiency and agricultural labour demand, particularly during droughts.