PT  - JOURNAL ARTICLE
AU  - Adamson, David
AU  - Loch, Adam
TI  - Incorporating Uncertainty in the Economic Evaluation of Capital Investments for Water-Use Efficiency Improvements
AID  - 10.3368/le.97.3.655
DP  - 2021 Aug 01
TA  - Land Economics
PG  - 655--671
VI  - 97
IP  - 3
4099  - http://le.uwpress.org/content/97/3/655.short
4100  - http://le.uwpress.org/content/97/3/655.full
SO  - Land Econ2021 Aug 01; 97
AB  - Long-run investments in water-use efficiency (WUE) are risky, particularly where water is required as a secure input. State-of-nature representations of supply outcomes provide an increased understanding of the vulnerability of capital and water users to adverse events. Using Californian data, we couple cost-benefit analysis to a state-contingent analysis approach to explore the riskiness of WUE investment payoffs and cash-flow outcomes when frequencies of states of nature change over the investment course. Critically, this allows us to represent decision-maker adaptation in the face of risk and uncertainty and the role of subsidy policy in those decisions.