Empirical essays on water markets Simon de Bonviller To cite this version: Simon de Bonviller. Empirical essays on water markets. Economics and Finance. Université de Strasbourg, 2019. English. NNT : 2019STRAB025. tel-03137171 HAL Id: tel-03137171 https://tel.archives-ouvertes.fr/tel-03137171 Submitted on 10 Feb 2021 HAL is a multi-disciplinary open access L’archive ouverte pluridisciplinaire HAL, est archive for the deposit and dissemination of sci- destinée au dépôt et à la diffusion de documents entific research documents, whether they are pub- scientifiques de niveau recherche, publiés ou non, lished or not. The documents may come from émanant des établissements d’enseignement et de teaching and research institutions in France or recherche français ou étrangers, des laboratoires abroad, or from public or private research centers. publics ou privés. UNIVERSITÉ DE STRASBOURG ÉCOLE DOCTORALE AUGUSTIN COURNOT (ED221) Laboratoire Gestion Territoriale de l’Eau et de l’Environnement (GESTE), École Nationale du Génie de l'Eau et de l'Environnement de Strasbourg (ENGEES) THÈSE présentée par : Simon de Bonviller Soutenue le 09/09/2019 pour obtenir le grade de : Docteur de l’Université de Strasbourg Discipline : Sciences Economiques Spécialité : Economie de l’Environnement Empirical Essays on Water Markets THÈSE dirigée par : Mme ROZAN Anne Professeure à l’ENGEES, Strasbourg MEMBRES DU JURY : Mme NAUGES Céline Directrice de recherches à l’INRA/TSE Mme MONTGINOUL Marielle Directrice de recherches IRSTEA M. WEILL Laurent Professeur à Sciences Po Strasbourg M. GLACHANT Matthieu Professeur à MINES Paritech, PSL Research University 1 « L’Université de Strasbourg n’entend donner ni approbation ni improbation aux opinions exprimées dans cette thèse. Ces opinions doivent être considérées comme propres à leur auteur. » 2 Marcher jusqu’au lieu où tarit la source Et attendre, assis, que se lève le nuage. Wan Guei 3 Table of contents Abbreviations and Acronyms .................................................................................................................. 7 Résumé en Français ............................................................................................................................... 10 General Introduction.............................................................................................................................. 26 Chapter 1: .............................................................................................................................................. 39 More market, more efficiency? Water market impacts on water use efficiency in the Australian agricultural sector .................................................................................................................................. 39 1. Introduction ............................................................................................................................... 40 2. Literature review: water markets, expected benefits and impacts on water allocation efficiency ................................................................................................................................................... 42 3. Research hypotheses .................................................................................................................. 45 4. Background: Agriculture and water markets in Australia ......................................................... 47 5. Data ........................................................................................................................................... 52 6. Econometric framework ............................................................................................................ 53 6.1. A panel data stochastic frontier model .............................................................................. 53 6.2. Endogeneity issues ............................................................................................................ 56 7. Results ....................................................................................................................................... 57 7.1. Questioning H1: Market existence and technical efficiency of agricultural production ... 57 7.2. Questioning H2: Water trade intensity and technical efficiency of agricultural production .. ........................................................................................................................................... 61 8. Robustness tests ......................................................................................................................... 63 9. Conclusion ................................................................................................................................. 64 10. References ............................................................................................................................. 66 11. Appendix 1: Summary statistics and data sources ................................................................ 72 12. Appendix 2: Results from the first step probit and linear regressions ................................... 73 Chapter 2: .............................................................................................................................................. 74 Is there insider trading in Australian water markets? ............................................................................ 74 1. Introduction ............................................................................................................................... 75 2. Literature review ....................................................................................................................... 79 2.1. Insider trading and financial markets ................................................................................ 79 2.2. Other influences on water prices ....................................................................................... 82 3. Water Markets Background ....................................................................................................... 83 4. Method ...................................................................................................................................... 86 4.1. Data and area ..................................................................................................................... 86 4.2. Regression ......................................................................................................................... 89 4.2. Robustness and sensitivity ................................................................................................. 91 5. Results ....................................................................................................................................... 92 5.1. Insider trading evidence .................................................................................................... 94 4 5.2. Other price drivers ............................................................................................................. 96 5.3. Summary ........................................................................................................................... 97 6. Conclusion ................................................................................................................................. 97 7. References ................................................................................................................................. 99 8. Appendix I: Summary statistics and times series tests ............................................................ 105 9. Appendix II: Insider trading or rational speculation? Additional investigation ...................... 108 Chapter 3: ............................................................................................................................................ 110 The Dynamics of Groundwater Markets: Price Leadership and Groundwater Demand Elasticity in the Murrumbidgee, Australia .................................................................................................................... 110 1. Introduction ............................................................................................................................. 111 2. Literature review: Groundwater markets, price leadership and groundwater demand elasticity .. ................................................................................................................................................. 114 3. Case Study ............................................................................................................................... 117 3.1. Overview ......................................................................................................................... 117 3.2. The Murrumbidgee .......................................................................................................... 118 4. Data ......................................................................................................................................... 122 5. Methodology ........................................................................................................................... 122 5.1. Price leadership method .................................................................................................. 123 5.2. Price elasticity of groundwater demand method ............................................................. 125 6. Results and analysis................................................................................................................