The problem addressed by this study is how a large urban water district can best respond to a drought or the prospect of a drought. Specifically, what is the least cost combination of alternatives to meet periodic shortages? A solution to this problem may involve structural approaches (such as...

If average costs in a nonrenewable resource industry are U-shaped, a competitive equilibrium may not be optimal and, indeed, may not exist. Although the differential equation that describes the change in the rate of extraction is the same for planner and firm, the boundary conditions obtained...

This paper develops a model of residential water demand under a nonlinear budget constraint. The theoretical model for an individual consumer is adapted to yield an aggregate model that preserves the structure of the individual demand function, and that can be used with aggregate (water district...

The two main objectives of the East Bay Municipal Utility District (EBMUD) water supply management program are to cope with a failure of the aqueducts in the Delta due to earthquake and flood damage and to mitigate periodic shortages. EBMUD emphasizes construction of additional terminal storage,...

Abstract: We reconsider the problem of inefficiency and nonexistence of a competitive equilibrium in exhaustible resource markets where extraction costs are nonconvex. The existence of a backstop technology (which induces a flat portion of the industry demand curve) restores both existence and...