We examine potential third-party effects arising from trading water from one region (rural) to another (urban). Using labor, water and heterogeneous land, rural agents produce a traded agricultural good and nontraded service good. Absent job market frictions, increased water trading improves per...

The paper aims to measure transaction costs and its effects on labor market participation and on wage earnings. The observed differences between buying and selling prices of rice across households are used to calculate transaction costs indices for villages which are incorporated into the...