Estimation of economic value of groundwater in arid lands agriculture (Case Study: Pistachio-producers in the Yazd-Ardakan plain)

Increasing demand and various uses of water resources has increased pressure on water resources. In addition, water use by one group of users has affects on usage possibility of other groups, so water resources management and its optimal allocation is very important. Undoubted, one of the most important tools for optimal allocation of water resources is economic valuation that emphasized in long-run development guidelines of water. Since decision making and allocation base on economic value amount have remarkable affects on micro and macro economic aspects of country, choosing the precision to choose method and its implementation is necessary. So, the aim of study, estimating water economic value in agricultural sections using production function approach in the Yazd-Ardakan plain. It illustrates departure in results providing inappropriate selection of functional form. Necessary data were collected from farmers with 154 questionnaires by stratified random sampling method. Next, various forms of production functions were estimated. Using econometric criterions, Translog production function was chosen for pistachio as best forms. Water economic value calculated for this crop is 310 Rial per cubic meter. Thus, total economic value of Water in this plain was estimated 109 milliard Rials.