PT  - JOURNAL ARTICLE
AU  - Rimsaite, Renata
AU  - Fisher-Vanden, Karen
AU  - Olmstead, Sheila
AU  - Grogan, Danielle S.
TI  - How Well Do U.S. Western Water Markets Convey Economic Information?
AID  - 10.3368/le.97.1.050719-0061R
DP  - 2021 Feb 01
TA  - Land Economics
PG  - 1--16
VI  - 97
IP  - 1
4099  - http://le.uwpress.org/content/97/1/1.short
4100  - http://le.uwpress.org/content/97/1/1.full
SO  - Land Econ2021 Feb 01; 97
AB  - An efficient market implies that potential gains from trade are fully captured. Achieving this requires a well-functioning market where prices reflect all available information. In the case of water rights markets, this implies that the permanent water rights transfer price reflects the sum of discounted returns to this asset (i.e., the lease price), the market interest rate, and a risk premium that reflects potential future water scarcity. The purpose of this study is to assess the efficiency of western U.S. water markets by using the asset pricing model to measure how well prices reflect long-run returns to permanent water rights.