Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/204320 
Year of Publication: 
2011
Series/Report no.: 
FOI Working Paper No. 2011/2
Publisher: 
University of Copenhagen, Department of Food and Resource Economics (IFRO), Copenhagen
Abstract: 
This paper proposes a tax mechanism modelled for water extraction in a river system with upstream and downstream farmers. The tax mechanism is based on the regulator's own estimation of aggregate extraction and for that reason the tax addresses the problem of asymmetric information. It is demonstrated that the tax mechanism ensures approximately correct marginal extraction incentives for the individual farmer. Consequently, it is concluded that the tax mechanism proposed here has a practical application.
Subjects: 
Water extraction
River system
Tax mechanism
Upstream-downstream users
Document Type: 
Working Paper

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