The Water Market for the Middle and Lower Portions of the Texas Rio Grande Basin

Authors

  • Andrew J. Leidner,

    1. Respectively, Graduate Research Assistant, Department of Agricultural Economics, Texas A&M University, 318F Blocker Building, 2124 TAMU, College Station, Texas 77843-2124
    Search for more papers by this author
  • M. Edward Rister,

    1. Professor and Associate Head, Department of Agricultural Economics, Texas A&M University, College Station, Texas 77843-2124
    Search for more papers by this author
  • Ronald D. Lacewell,

    1. Professor and Assistant Vice Chancellor, Department of Agricultural Economics, Texas AgriLife, Texas A&M University, College Station, Texas 77843-2124
    Search for more papers by this author
  • Allen W. Sturdivant

    1. Extension Associate, Department of Agricultural Economics, Texas AgriLife Extension, Texas AgriLife Extension and Research Center, Weslaco, Texas 78596
    Search for more papers by this author

  • Paper No. JAWRA-09-0191-P of the Journal of the American Water Resources Association (JAWRA). Discussions are open until six months from print publication.

(E-Mail/Leidner: aleidner@tamu.edu).

Abstract

Leidner, Andrew J., M. Edward Rister, Ronald D. Lacewell, and Allen W. Sturdivant, 2011. The Water Market for the Middle and Lower Portions of the Texas Rio Grande Basin. Journal of the American Water Resources Association (JAWRA) 47(3):597-610. DOI: 10.1111/j.1752-1688.2011.00527.x

Abstract:  Regional water management on the United States’ side of the middle and lower portions of the Rio Grande basin of Texas has been aided by a functioning water market since the early 1970s. The water market operates over a region that stretches from the Amistad Reservoir to the Rio Grande’s terminus into the Gulf of Mexico. This article provides an overview of the organizations, institutions, policies, and geographic particulars of the region’s water-management system and its water market. In recent years, this region has experienced high population growth, periodic droughts, and a reallocation of water resources from the area’s agricultural sector to the municipal sector. Demand growth for potable water and a relatively fixed supply of raw water are reflected in increasing prices for domestic, municipal, and industrial water rights. Rising prices in the presence of scarcity and the transfer of water from lower-value to higher-value uses indicate that the market is operating as suggested by economic theory. Reasons for the market’s functionality are presented and discussed. Finally, suggestions are presented which might mitigate potential complications to market operations from aquifer depletion and aid the management of instream river flows.

Ancillary