Optimal exploitation of renewable groundwater resources when extraction affects the probability of occurrence of an irreversible event is studied. The term irreversible signifies that the event occurrence renders the resource obsolete. It is found that uncertainty concerning the event occurrence...

When used in conjunction with surface water for irrigation, groundwater serves two roles: to increase water supply; and to mitigate fluctuations in the supply of water. The later is the buffer role. This paper identifies and evaluates the economic benefit associated with the buffer role of...

The economic value of energy storage to meet peak electricity demand is analyzed with an emphasis on the role of demand uncertainty. The concept of the stabilization value, which measures that part of the benefit of the storage project which is due solely to the stochastic demand components, is...

We propose a simple and tractable procedure for evaluating producer welfare under price uncertainty. These properties are achieved at the cost of assuming constant absolute risk aversion, where risk attitude depends on the stock of wealth but not on the flow of income. Numerical examples...

Irrigation water (including rainfall) that infiltrates the subsurface carries salts, pesticide and fertilizer residues, and other trace elements, thus causing a contamination of aquifers and soils. A similar situation occurs when irrigating with saline groundwater (aquifers containing saline...

Producer welfare indices under price uncertainty are derived using the concept of certainty equivalent prices. In this approach the marginal cost function is used instead of the ex-ante supply function; the effects of uncertainty and risk preference are captured by certainty equivalent prices....