We develop a valuation model based on conservation rules, and stochastic prices and inventories. Dynamic programming determines the optimal harvest amount. A hedge portfolio based on a resource reserve is proposed. The optimal size of the reserve is determined, as well as its value.

The transition from an open access to a private property rights management regime requires valuation mechanisms that respond to new incentives. The analysis relies on the NPV model, the Arrow Fisher (1972) result and the Black-Scholes option pricing model to describe the necessary elements of...

The topic of virtual water has received substantial attention in recent years, both in scholarly literature and the popular press. Many authors have described the “flow of virtual water” between countries that engage in the trade of agricultural crops and livestock products. Some have...

Water prices can convey critical information regarding scarcity, availability, and opportunity costs. Carefully crafted water tariffs enable public officials to achieve socially desirable objectives, such as providing subsidies to poor households and discouraging inefficient water use by...

Urban water tariffs vary substantially across cities and regions, for reasons that reflect water scarcity conditions, local or regional objectives, and political considerations. Comparisons of average water prices across regions are not generally meaningful, as the prices are not weighted or...

Food production in 2050 will be sufficient, globally, but many of the poor will remain food insecure. The primary cause of food insecurity will continue to be poverty, rather than inadequate food production. Thus, policies and investments that increase the incomes of the poor will remain the...