Effect of Water Price on the Multicrop Production Decision: Appling Fixed Allocatable Input Model in Georgia

Abstract

This study applies the fixed allocatable input model to test the effect of water price on the multiple production decision in Georgia, U.S. The limited dependent variable models are applied and intensive data are analyzed in this study to estimate the decision for crop choice, land allocation, product supply, and water demand functions at crop-level. In order to investigate the effect of water price on crop-level demand, the total water price effect on farm water demand is decomposed the intensive margin and extensive margin.Resource /Energy Economics and Policy,