Estimation of Irrigation Water Demand Function for Tomato in Iran

ABSTRACT: Water is the source of life on the planet earth, but the people are facing insufficient supply of water and it has become one of the most important constraints to economic development. The main issue to address in water management is to fulfill the ever-increasing demand for water. The supply of water is usually limited, while the quantity of water demanded has increased mainly due to population growth. It is believed that a rationalized water pricing system would play a crucial role in the optimal allocation of water resources. Planning for efficient use of water is important when there is a severe limit to its availability. The demand elasticity for every good, service, or input determines how a change in price, ceteris paribus, affects users’ quantity demanded. This study investigates the structure of irrigation water demand by estimating the derived demand for water on a particular crop, tomato, in Iran. A demand function is estimated for tomato in Iran by using total statistic data and panel data. After performing the relevant statistical tests, the price elasticity of irrigation water demand is computed. Other elasticities are also estimated using the other regression coefficients. This study uses secondary data to assess water price elasticity. Data and information from 2001 to 2006 from 23 provinces in Iran is collected from secondary sources.